The man's body was recovered from the Vauxhall Vectra, which was marked with taxi plates, after it careered into Peterhead harbour at around 8.50am yesterday morning.
A member of the public, who was believed to have jumped into the water after the car, was treated for hypothermia at the scene.
The taxi was removed from the water around 10am with the man's body inside.
Gavin Sutherland, 33, an offshore worker from Peterhead, told how he jumped into the harbour in a desperate bid to save the driver.
He said: "I noticed three guys standing at the bottom of the brae. I saw the car going into the water.
"I took off all my clothes, swam across, tried a few times but I couldn't get him.
"There was obviously someone in the car so I had to help them. I had to come back up as I could have died myself."
This was the second time that hero Gavin had risked his life — the first was in the exact same spot 14 years ago.