Picnic Island, also known as Rabbit Island, is a small sandstone island in Great Oyster Bay a short distance from Coles Bay. The Marine Life Network guide rates it 5 out of 10 as an alternative site when north-easterly weather makes other places unsuitable, with depths of 3-6 m.

The guide notes surprisingly large numbers of fish for such a shallow site, including leatherjackets and schools of Trachinops (southern hulafish), and records a large stingray. The sandstone reef differs from the granite that dominates the rest of Freycinet, with more ledges and a flatter profile, and supports brown algae and sponges.

The main hazard highlighted by the guide is fishing nets set around the island, which divers need to watch for carefully. The island is also privately operated as a small accommodation retreat, so landing is not permitted without permission.

Picnic Island suits new divers and snorkellers, and is a useful weather alternative for divers staying in Coles Bay with their own boat. It is not a destination dive and there is no operator running trips there, but on a day when the sea breeze has closed the ocean coast it provides an easy, fishy shallow dive.

Some context helps set expectations for all Freycinet diving. The peninsula's pink granite continues under water as rounded boulders, cracks and steep faces, and the area sits where the warm East Australian Current meets cooler southern water, so species lists mix typical Tasmanian fish with more northern visitors. Over recent decades warming water and grazing by the long-spined sea urchin, which has spread south from New South Wales, have thinned kelp beds along the east coast, and descriptions written in the 1990s may not match what you find today.

Coles Bay is 30 minutes south of the Tasman Highway via the C302 (turn off 12 km south of Bicheno), about 2 hr 45 min from Hobart and 2 hr 30 min from Launceston. The main public boat ramp is at Coles Bay township; boats reaching the ocean side of the peninsula or Schouten Island need a seaworthy vessel, as the run around Cape Degerando or through Schouten Passage is exposed. Picnic Island lies a short run (about 10 minutes) west-south-west of the Coles Bay ramp across Great Oyster Bay.

Private accommodation operates on the island, so do not land without permission.

Picnic Island is sheltered from north-easterly weather and is the alternative site when the NE sea breeze blows. Southerly and westerly winds make Great Oyster Bay choppy and reduce visibility. Avoid after heavy rain when runoff from the Swan River estuary can colour the water.

Rain washes tannin-stained runoff into Great Oyster Bay, and summer afternoons commonly bring a fresh north-easterly sea breeze, so plan dives for the morning.

Drop on the lee side of the island in 3-4 m and swim along the sandstone reef edge, watching for nets. Turn at half gas and return along the same edge. Turn the dive at half gas (thirds where current or overhead sections are involved), deploy an SMB before surfacing for the live-boat pick-up, and complete a 3-minute safety stop at about 5 m where depth allows.

No dedicated dive operator at Coles Bay or Freycinet. Sites are dived from private boats and occasional club expeditions (Tas Uni Dive Club, TSDC, Launceston clubs); the Marine Life Network guide notes that Coles Bay is the usual starting point for Schouten Island charters. Cruise and kayak operators in Coles Bay do not offer scuba.