The beachside suburb was abuzz with the tale of the lucky escape from the smiling predator, which cleared the water of swimmers before 8am.

The surfers speculated the shark had been a great white between 2.5m and 3.5m long.

Former SAS soldier Keith Fennell, of Thirroul, confirmed he had been one of the surfers.

"It sort of jumped up out of the water right next to one of the other guys, had a look around and then dived down and swam off," he said.

"Look, I don't want to make a big thing of it because I don't want to discourage people from coming and swimming here."

Thirroul newsagent owner Kim Oliver was one of the first to speak to the surfers after the incident.

"It was apparently a big mother of a thing," Mr Oliver said.

"They came in the shop afterwards with eyes as big as saucepans.

"They were from a group of a few people who train there most mornings and swim or paddle out to a buoy about a hundred yards past the break.

"I think today they had the Malibus out and were waiting, in the normal surfing area just behind the break, for waves.

"This monstrous thing just came up, out of the water.

"They reckon it was two or three foot wide. It had a squiz at them and then the big tail came around and splash, it was gone."

The surfers paddled to shore and immediately alerted other beachgoers, including some ocean swimmers who regularly do laps of the beach out past the break. The water was cleared within minutes.

Mr Oliver said it was thought the shark was a great white but the surfers "didn't hang around to identify it".

A Wollongong City Council spokeswoman said Thirroul lifeguards were aware of the incident but had not been on patrol at the time. She said when the lifeguards began their patrol at 9am and put up the flags, they checked the beach and found it was safe to open.