The operation was turned to a recovery effort at around 3 a.m. Sunday, and next-of-kin have been notified, according to a statement from III Marine Expeditionary Force.
"The transition comes after teams led continuous sustained search efforts supported by aircraft and ships. As the sea state permits, recovery efforts will be conducted to further search, assess and survey the area, in coordination and with assistance from the Australian Defence Force," the statement said.
Twenty-three of the 26 personnel aboard the MV-22 Osprey have been rescued. The Osprey is an assault-support aircraft with the capability to land and take off vertically.
The Osprey had launched from the USS Bonhomme Richard amphibious assault ship and was conducting regularly scheduled operations when the helicopter "entered the water," according to a statement from the III Marine Expeditionary Force.
"The ship's small boats and aircraft immediately responded in the search and rescue efforts," the statement added. "The circumstances of the mishap are currently under investigation."
President Donald Trump has been briefed on the mishap by White House Chief of Staff John Kelly, according to the White House.
"I can confirm no Australian Defense Force personnel were on board the aircraft. The United States are leading the search and recovery effort," Payne noted in her statement. "Our thoughts are with the crew and families affected."