Simpson, 36, was training for the America’s Cup with the Artemis team, Sweden’s entry in the competition, capsized and he was trapped underneath for about 10 minutes.
Simpson was in an Artemis Racing catamaran which capsized while training for the America's Cup, which is scheduled to be held in the area later this year.
The 36-year-old, who was part of a 11-man crew aboard the catamaran, was brought to shore following the incident and taken to the St Francis Yacht Club, where he was unable to be saved.
Simpson won a gold medal alongside Iain Percy in the star class in Beijing in 2008 and claimed silver with the same partner in London last year.
"The entire Artemis Racing team is devastated by what happened. Our heartfelt condolences are with Andrew's wife and family," Artemis chief executive Paul Cayard said.
Tributes began pouring in for the popular two-time Olympic medallist within hours of the tragedy being announced.
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