A teenager has died in hospital after falling into the sea as a boat capsized.

The vessel, carrying four people, flipped after being struck by a wave off the coast at The Cut near Bunbury, 2.5 hours south of Perth , about 1pm on Friday.

Water police, local volunteer sea rescue crews, and the RAC Rescue Helicopter raced to the scene, rescuing all four people, who were wearing life jackets.

The teenage boy was rushed to Bunbury Regional Hospital under priority conditions, where he later died.

The other three passengers — one man and two women — were uninjured, police said.

7NEWS has seen footage of the upturned hull in choppy waters.

A report will be prepared for the coroner.

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