Police SAR coordinator Sergeant Aaron Nicholson said Trevor Lloyd Hawke (70) was out sailing with an associate when he fell overboard around 6pm.
Mr Hawke's sailing companion tried to pick up Mr Hawke but he could not make it back onto the vessel and was seen to sink under the water and out of sight.
Dozens of people on boats and a helicopter searched unsuccessfully for the missing man in Roys Bay from about 6.30pm until 9.30pm when the search was called off because of darkness.
A helicopter, ground crew and water crew searched for Mr Hawke, but found nothing.
A Southern Police Communications spokesman said Mr Hawke was wearing a life jacket which required manual inflation.
Sergeant Nicholson said that given the time that had elapsed since he was last seen, there was little hope of survival in such cold waters.
A yacht club member, who asked not to be identified, said he understood the usual Thursday night yacht racing, run each week by the club, had been cancelled yesterday because of rough lake conditions.
However, some members had decided to take their boats out.
Jet-boat driver Brent Pihama, who owns Wanaka River Journeys and was involved in the search, said at least a dozen boats, including commercial operators, private boats and marine search and rescue vessels, had been used in the search.
Sergeant Nicholson said Mr Hawke's wife and family have been informed "and are obviously shocked and grieving at the news".
