Police have found a body believed to be that of a man who disappeared at a popular swimming hole in far northern New South Wales.

The 19-year-old had been with friends at Hanging Rock Falls, north-west of Nimbin, on Tuesday.

Police said the man was using a rope to swing out over the waterhole when he hit a rock face and fell into the water. He did not resurface.

Despite efforts from friends and bystanders he could not be found.

Police, NSW Ambulance paramedics and the Westpac Rescue Helicopter also failed to find any trace of the man.

A further search on Wednesday morning located a body.

While the body has not yet been formally identified, police believe it is the missing man from the state's Illawarra region.

An investigation is underway into the circumstances surrounding his death.

The swimming spot is popular with tourists and a number of people have been injured or died there.

Locals living nearby said the waterhole was dangerous to visitors and up to seven metres deep in some places.

A 14-year-old boy died after falling into the waterhole four years ago.

His body was found in deep water by a police diving team.

The swimming hole is on a crown reserve and is the responsibility of the NSW Government.

A spokesman for the NSW Department of Crown Land said a sign warning against swimming at the waterhole was put up three years ago after the death of the 14-year-old.

He said the department would cooperate with any inquiry arising from the current incident.