A helicopter carrying six people crashed in New York City's East River yesterday, killing all passengers, while the pilot escaped, police said.

Two of the five passengers died at the scene and three were taken to two area hospitals where they later died, a spokesman for the New York City Police spokesman confirmed.

The pilot freed himself and was rescued. Police said he was treated and discharged from hospital in good condition.

Moments before the helicopter crashed, the pilot frantically radioed for help, it has been reported.

"Mayday, mayday, mayday," the pilot said, according to the reports. "Engine failure. We've got an engine failure over the East River."

The Federal Aviation Administration said the Eurocopter AS350 went down near the northern end of Roosevelt Island at about 7pm local time and it was investigating.

The National Transportation Safety Board said its investigative team would arrive at the scene today.

"It's a great tragedy," said New York Fire Commissioner Daniel Nigro. "It took a while for the divers to get these people out."

Mr Nigro said when the divers reached the helicopter it was inverted in 15 metres of water with 4C water temperatures.

The passengers were tightly harnessed and the harnesses had to be cut and removed to free them, he added.

A Reuters photographer witnessed three people who were recovered by rescue divers being wheeled on stretchers onto a midtown pier shortly before 9pm.

New York City Police Commissioner James O'Neill said the aircraft was registered to Liberty Helicopters, a sightseeing and charter service in New York, and it was on a private charter "photo shoot".

The US Coast Guard launched three boats to aid in the response, joining New York City emergency responders.

Video of the incident filmed by an onlooker and posted on Twitter showed a red helicopter descending toward the water at dusk, then landing with a large splash before tipping onto its right side, its tail lights still flashing.

Image courtesy of JJ Magers