A fisherman spotted the body about 150m south of The Gap, a rugged cliff face at Watsons Bay in Sydney's east, on Wednesday.
Police made the recovery not far from where Mr Klingender was found last week and confirmed it be the 51-year-old entrepreneur.
The find ends a week-long search for the pair who set off on a fishing trip from Sydney Heads on the morning of July 20.
Their 7.8m inflatable fishing boat is believed to have capsized after striking underwater rocks in five-metre waves off Bondi Beach.
Marine Area Command Superintendent Joe McNulty told media on Saturday neither of the friends were wearing a life jacket when thrown into the sea.
"Those large swell have contributed to the loss of two good men," he said.
"Know your abilities, know your environment and the conditions."
Efforts to locate Mr Findlay had been extensive.
"We threw the police divers at it and they searched 1000 metres of shoreline and underwater areas," Supt McNulty said.
He said police had vision of the two men fishing off Ben Buckler near Bondi and believed their boat capsized in the five-metre swell when it struck a hidden rock ledge.
"This was a violent accident, a tragic accident we believe could have been avoided," he said.
"Both of them were not wearing life jackets."
He said the men were trolling, a fishing method that involves trailing lines behind a vessel. He said they were too close to the cliffs for the conditions.
Sup McNulty said the operation had spanned more than 20km, from South head to Cape Solander near Botany Bay before the second body was finally found.
The four-tonne vessel the men were in is still lodged tight against the rocks under the cliffs at South Head, with police attempting to recover evidence from it.
A brief of evidence will be prepared for the coroner.
