Officials said the 53-year-old, known only by his surname Lee, became unconscious and later died in hospital.
The man is the first fatality among divers searching the Sewol ferry, which sank on April 16 with 476 people on board.
Only 174 people survived, with many trapped inside the vessel. So far the disaster has claimed 262 lives, with 40 others missing.
South Korea state news agency Yonhap reported that the man was a veteran crew member of Undine Marine Industries, which specializes in maritime engineering and rescue work.
He had lost consciousness shortly after diving into waters 25m deep in the early hours of Tuesday.
Fellow divers lost communication with him five minutes into his dive and later pulled him to the surface. It was his first search attempt in the Sewol, according to the authorities.
PM Chung Hong-won has since ordered government officials overseeing the rescue operation to thoroughly check divers’ health conditions.
Divers have been battling bad weather and fast currents to retrieve bodies over the past three weeks. Inside the ferry, they must also navigate floating debris and the maze of corridors, reports say.
Yonhap said another civilian diver, aged 31, fell unconscious last week after diving four times before daybreak.
Several others have also been treated at hyperbaric oxygen therapy centers.
Authorities said divers were now working their way to the last three unopened rooms next to a snack bar on the ferry’s third floor.
But they did not expect to find many bodies there as they were not occupied by the high school students who were the majority of the passengers, a spokesman said. Divers would also recheck areas previously searched.
Earlier this week, workers put out more nets around the site to prevent bodies floating away.
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