Police said a search and rescue mission in Balclutha this morning had located the 81-year-old dementia patient in Crossleigh Cres about 9.30am.
SAR teams from Balclutha and Catlins were involved in the search, alongside volunteers in jetboats, rescue dogs and searchers on foot.
Senior Constable Murray Hewitson, of Owaka, said the woman, from Clutha Views rest home in Balclutha, appeared to be unharmed.
"The lady has been taken to hospital for a precautionary assessment, but appears to be fine.
"This is a great outcome, and a big thank you to the volunteers who stepped up so quickly to help bring it about. We're rapt."
Police had earlier sought help from the public in locating the woman.