Emergency workers described the crash site in the Lane Cove National Park, at the western end of Canoon Road, in South Turramurra, as horrific.
The Bell 206 went down about 9.15am on Friday, startling nearby residents who reported hearing a loud explosion and seeing smoke.
The Australian Transport Safety Bureau(ATSB) said, the helicopter was a Bell 206, which can seat between five and seven people, including the pilot.
The wreckage was found about 100 metres into the bush, at the bottom of a 10-15m cliff face that emergency services workers could only reach on foot and by abseiling down.
NSW Fire and Rescue Inspector Chris Bishop said,"The scene's quite horrific, the chopper has been destroyed, it's an horrific scene for all crews working there,"
Acting Superintendent Michael Banfield of Ku-Ring-Gai Local Area Command said two bodies were found and police were trying to find the helicopter owner so they could identify those on board.
The dead include the pilot and a single passenger, and they are both believed to be male.
ATSB is sending a team to investigate the crash and would look at whether bad weather was a factor.
Police are expected to retrieve the bodies later in the day.
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