The accident occurred just off Horn Head in Dunfanaghy.
The coastguard was alerted at around 3:30pm this afternoon that a man had fallen overboard off a fishing vessel.
The man was one of two men working on a lobster boat off Horn Head this afternoon when the accident occurred.
A massive search and rescue operation was launched in an attempt to retrieve the fishermen from the sea.
Mulroy Coastguard were the first on the scene and managed to pluck the man from the water.
He was then taken by the Rescue 118 helicopter to Letterkenny General Hospital.
However, he was pronounced dead shortly after arrival.