The USS Fitzgerald collided with the Philippine-flagged merchant ship the ACX Crystal at around 2:30 a.m. Saturday local time (1:30 p.m. Friday ET) about 56 nautical miles southwest of Yokosuka, officials said.
"Divers were able to access the space and found a number of bodies", the Seventh Fleet said in a statement. Bryce Benson, was airlifted early Saturday to the U.S. Naval Hospital in Yokosuka and was in stable condition with a head injury, the Navy said.
Seven sailors were left missing and three injured after Saturday's collision, which the US Navy said nearly sank the destroyer, BBC reported.
With the aid of tugboats, the badly damaged guided-missile destroyer Fitzgerald returned to its home port Yokosuka Naval Base, south of Tokyo, about 16 hours after the collision.
Water rushed into the ship as the impact crushed the Fitzgerald's forward starboard side, above and below the waterline, damaging two berthing spaces, a machinery area and the ship's radio room, the Navy said.
He said the ship was salvageable, but repairs would likely take months.
Sailors who went missing on the USS Fitzgerald after it collided with a Filipino merchant vessel were found dead, it was reported. Cmdr. Bryce Benson was the first to be evacuated from the damaged vessel and is being treated at the USA naval hospital at Yokosuka.
U.S. Navy personnel set up support and counseling services to help families as they sought updates on crew members.
A final toll would not be released until the sailors' families had been contacted, the navy said.
There was no immediate explanation for the collision.
According to him, the Fitzgerald is salvageable but the fix works will likely take months.
"His cabin was destroyed, he is lucky to be alive", Vice Admiral Aucoin said of Commander Benson. The search at sea, has been called off, he added.
Japanese media said all seven sailors were found dead. The 222-meter Philippine-flagged ACX Crystal had large scrapes on its bow, but none of its 20 crew were injured, Japan's coastguard said.
"This was a severe emergency, but the ship's crew was swift and responsive and I can't tell you how proud I am of the crew for what they did to save the ship", Aucoin said.
The Fitzgerald, an Arleigh Burke class guided missile destroyer, would normally be carrying a crew of around 250 sailors and officers.
Multiple investigations are under way to determine how a technologically advanced US warship was not able to get out of the way of a huge and cumbersome container ship, even if it had the right of way.