10 soldiers were plucked from the water after the Army MRH-90 Taipan multi-role helicopter ditched into the water near Jervis Bay, 195km's south of Sydney.
Two of the crew sustained minor injuries from the crash that occurred just after 9pm.
“All 10 Australian defence force personnel on board the aircraft have been recovered and accounted for and are being assessed by medical personnel at HMAS Creswell, south of Nowra, NSW,” an ADF statement said.
The chief of army, Lt Gen Simon Stuart, thanked emergency responders for their quick action.
“Tonight quick responses from ADF personnel and emergency services and well drilled teams prevented a potential tragedy,” Stuart said.
“We will conduct a thorough investigation into this incident to determine the cause and ensure the platform remains safe to operate.”
The ADF has temporarily paused the training activity and will ground the MRH-90 Taipan fleet while the cause of the incident is investigated.
The incident site is being contained by Australian federal police and port services personnel.
The MRH-90 is one of the most advanced tactical troop transport helicopters of the 21st Century. As a multi-role helicopter, the MRH90 can undertake troop transport, search and rescue, special operations and counter-terrorism missions.
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