A young boy who went missing for 18 hours after he wandered off from the campsite his parents were staying at in Australia has been found.

Three-year-old James Skillen wandered off from the site in Mudgee, New South Wales at about 5pm on Saturday, and his parents were worried sick.

Despite searching through the night for their boy, young James was nowhere to be found - and a search team made up of members of the public made little headway on Sunday either.

But just as hope was beginning to fade, a local spotted James on a 4WD bush track just five kilometres from the camp.