Some 160 coast guard and navy divers searching for survivors inside the ship's wreckage, a few kilometres from the shore of Byeongpung Island, which is not too far from the mainland. The area is about 470 kilometres from Seoul.
Lee Gyeong-og, a vice minister for South Korea's Public Administration and Security Ministry, said 30 crew members, 325 high school students, 15 school teachers and 89 non-student passengers were aboard the ship.
The ship had set sail from Incheon, a city in the northern part of the country and the site of South Korea's main international airport, last night for an overnight, 14-hour journey to the tourist island of Jeju.
About three hours from its destination, the ferry sent a distress call at about 9 am local time today after it began listing to one side, according to the Ministry of Security and Public Administration. Officials didn't know what caused it to sink, and said the focus was still on rescuing survivors.
Kang Byung-kyu, a government minister, said the two dead are a female crew member and a male believed to be a student.
A third body was found in the water but details were sketchy. He said 164 people were rescued, of whom 55 were injured. He said 292 people were missing, likely either trapped inside the ship or floating in the ocean.
