The elder Chesters and 18-year-old Alexia Alexandra Molina from France were rescued by fishermen at around 1 a.m. local time (5 p.m. GMT) off Indonesia’s Bintan island, southeast of Singapore, and some 60 miles (100 km) south of where they went missing, officials said.
The group’s instructor, Kristine Grodem, 35, from Norway, was rescued on Thursday.
Nathan, whose body has not been recovered, was confirmed to have died by his father, “as he was too weak and could not survive,” the Malaysian Maritime Enforcement Agency said in a statement.
Police had said Indonesian authorities would take over the search for the teenager as he had likely drifted into their waters.
“We believe there is a high likelihood that he is no longer in Malaysian waters based on the movement of sea currents, as well as the time and location where the other victims were found,” Mersing district police chief Cyril Edward Nuing told reporters.
Malaysian assets would be on standby to help, he said.
Grodem earlier told officials the group surfaced about an hour into their dive on Wednesday but could not find their boat.
She was later separated from the others after being caught in strong currents.
The boat operator who took them to the dive site was detained after testing positive for drugs, police said.