UPDATE: A body, believed to be that of abducted Sydney student Jamie Gao, has been recovered at Cronulla beach.
While police are yet to confirm the identity of the body, the officer in charge of investigating the 20-year-old's murder has sent homicide detectives to the scene.
News Ltd has published a photo of a body, wrapped in a blue tarpaulin, wearing white sneakers, floating in the ocean.
Former NSW detective Glen McNamara is expected to front court shortly charged with Mr Gao's murder and commercial drug supply.
Disgraced police officer Roger Rogerson is still being sought for questioning.
EARLIER: JAMIE Gao was selling a 3kg bag of meth to a former NSW detective when he was driven to secret spot and killed, police have alleged.
Investigations into the abduction and murder of the 20-year-old Sydney university student took a shocking turn on Sunday night when police arrested 55-year-old Glen McNamara.
The former Kings Cross detective, who gave evidence before the Police Royal Commission, is preparing to front a south Sydney court charged with murder and commercial drug supply.
While police have not released the name of the second suspect, a search is believed to be underway for disgraced NSW police officer Roger Rogerson, whose Padstow home was raided on Sunday.
An "object" - suspected to be linked to the investigation - was being recovered off Cronulla Beach this morning,
Detective Superintendent Luke Moore told reporters police believed Mr Gao was involved in a "substantial" drug transaction when "something went wrong" last Tuesday.
He said Mr Gao had gotten into a white sedan with two men and that a silver car had followed them to an area which was being examined by forensic officers.
He confirmed police would allege Mr McNamara was present but would not say whether Mr Rogerson was suspected of being the second person in the car.
He also said it was "too early" to say whether a boat seized at Padstow was suspected of being used to dispose of the student's body.
APN Newsdesk understands the Padstow raids were carried out at Mr Rogerson's property and that police also seized a white car which allegedly contained 3kg of methamphetamine.
Mr Rogerson, 73, was a well known figure in NSW in the 80s.
The former decorated officer had received a string of bravery medals and was well respected until he was dismissed over the shooting death of a Sydney drug dealer.
He later served two jail terms for lying in court and was acquitted on charges relating to drugs and conspiracy to murder.
Sydney homicide detectives have flown to Brisbane where Mr Rogerson is believed to be staying.
Former detective charged with murder of Jamie Gao
FORMER NSW detective has been charged with murder and another is being hunted in Queensland as police continue to investigate the disappearance of Sydney University student Jamie Gao.
Glen McNamara, a former Kings Cross detective who gave evidence before the Police Royal Commission was arrested during a traffic stop in Sydney's south.
He has since been charged with murder and commercial drug supply.
Police have also raided the Padstow home of disgraced officer Roger Rogerson.
The 73-year-old was a decorated senior police officer until he was dismissed following the shooting death of drug dealer Warren Lanfranchi in the early 80s.
He is believed to be in Queensland.
There were reports on Monday morning that police had retrieved the body of a man off a beach at Cronulla about 7.30am. Initial reports suggested it was Mr Gao.
In a statement, police said detectives from the Robbery and Serious Crime Squad had arrested and charged a 55-year-old Cronulla man with the murder of Mr Gao.
The student was last seen getting into a white vehicle on Arab Road, Padstow, around 1.40pm last Tuesday.
The car, which was parked near a fast food restaurant on the corner of Arab Road and Davies Road, left the scene shortly after Mr Gao got into the vehicle. The 20-year-old has not been seen since.
Detectives from the Robbery and Serious Crime Squad formed Strike Force Album to investigate Mr Gao's disappearance and yesterday around 6.30pm, they arrested a man after a vehicle stop in Kyeemagh.
The man was taken to Kogarah Police Station where he was charged with murder and large commercial drug supply.
He was subsequently refused bail to appear in Kogarah Local Court on Monday.
Following the man's arrest, police executed a search warrant at his residence in Cronulla, seizing a blue Ford Falcon XR6 and a number of other items of interest to investigators.
Officers also executed search warrants at a home in Padstow Heights, seizing a silver Ford Falcon motor vehicle, and a storage unit in Caringbah, where they seized a boat.
A third car, a white Ford Falcon, has also been seized from a location in Cronulla. Detectives believe this is the vehicle Mr Gao got into on Arab Road last Tuesday.
The Commander of the Robbery and Serious Crime Squad, Detective Superintendent Luke Moore, said the investigation by Strike Force Album will continue.
"Our inquiries to date have led us to conclude that Mr Gao has been murdered," Detective Superintendent Moore said.
"While we have charged a man with murder, this investigation will continue and we may make further arrests.
"We still don't know where Mr Gao's body is and are strongly encouraging anyone who can help us locate his remains to contact police."
Police are urging anyone with information about this incident to call Crime Stoppers on 1800 333 000 or use the Crime Stoppers online reporting page: https://www1.police.nsw.gov.au/.
Information you provide will be treated in the strictest of confidence.
Update your news preferences and get the latest news delivered to your inbox.