Ms Davis had been at a party in Vaucluse on Saturday night and is believed to have been one of a group of people who went to the nearby Diamond Bay clifftops to watch the sunrise.
In a statement, NSW Police said that emergency services, including Pol Air and the Marine Area Command, were called at 6.30am.
Four hours later, her body was retrieved from the water.
“An investigation is under way. A report will be prepared for the coroner,” the police statement said.
The make-up artist from Lincolnshire had been in Australia for only a matter of weeks when she died.
Friends paid tribute on social media to the “incredibly beautiful” woman.
“You were an incredibly beautiful model and talented artist giving so much colour to the world … you were so fun to be with that so many people have so many great stories and memories they tell about you. You will be so very sorely missed. Thinking of your family and close friends in this devastating time … I hope all the koalas and kangaroos are looking after you,” wrote one.
“Heart-broken. Thinking of your family and close ones right now,” wrote another.
“Horrific news, hope you’re being looked after up there,” wrote yet another.
British newspaper The Mirror reported that Ms Davis’ family were worried after not hearing from her on Sunday, Australian time.
One concerned family member wrote online: “Anyone seen Maddie? Not been able to get hold of her please get in touch if you were out with her last night.”
Sally Rawsthorne is a Crime Reporter for The Sydney Morning Herald.