The South Otago community is in shock following the death of Eluned Jane Finney, who was on the boat with her father - a 48-year-old Balclutha man - and a 13-year-old male friend.
The trio, believed to be on a fishing trip, headed towards Surat Bay east of Owaka early yesterday afternoon on a 12ft (3.66m) aluminium boat.
A police statement said about 300m from shore the boat's engine began to fail and then cut out. The boat became swamped, before capsizing about 1.30pm.
Acting Sergeant Steve Griffiths, of Balclutha, said the man and the teenage boy made it to shore, and the teenage girl was reported as missing.
All three were wearing life jackets, he said.
The Otago Regional Rescue Helicopter was deployed to help search for the girl, who was found on shore about half an hour later.
A small crowd of holidaymakers and locals quietly watched the rescue operation from the beach and the nearby settlement of Newhaven.
Acting Sgt Griffiths thanked those who helped at the scene.
About six police officers, the Owaka Volunteer Fire Brigade, Catlins Marine Search and Rescue, and St John staff from Owaka and Balclutha attended.
The death has been referred to the coroner.
