A 34-year-old man from Lake Heights and 44-year-old man from Koonawarra were anchored 400m off Hill 60 when they struck trouble just before 11am.

Illawarra ambulance district officer Terry Morrow said it appeared the boat had become stranded on the reef and the pair struggled for about 30 minutes to free themselves - all the while being pounded by rough 2m seas.

"They were hit by a freak wave and the water went into the boat and dragged the anchor and the boat on to rocks," he said.

"They couldn't get the motor started because of the water that had come over the bow."

At some point another wave capsized the vessel and they were thrown into the ocean.

Concealed by white wash and with the beach closed, their predicament went unnoticed until they were spotted by a lifesaver.

Port Kembla Surf Life Saving Club patrol member Steve Tresidder said lifesavers were down at the water's edge, contemplating whether to open the beach.

"The boat was spotted fishing fairly close to the rocks.

"We were just commenting, 'Jeez, he's getting a bit close', and then one of the members saw the boat picked up by a wave and flipped," Mr Tresidder said.

Two lifesavers responded in a IRB, to find two surfers holding the men's heads above water.

"They were getting pounded. One bloke came over the rocks and landed in the lagoon," he said.

The duo were rescued with the aid of police rescue officers and treated by ambulance personnel.

They were taken to Wollongong Hospital suffering exhaustion, sea water intake, cuts and abrasions.