The body was found about a mile away from where the mum was last seen walking her dog in St Michael's on Wyre, on January 27.
A formal identification is yet to be carried out, but Ms Bulley's family were quickly informed about the discovery.
Two dog walkers discovered the body and immediately called the police, it's believed.
They stumbled across the body about a mile downstream of St Michael's on Wyre - south of a local caravan site and fish farm.
After receiving the tip-off, Lancashire Police sealed off all the surrounding roads and called in expert divers.
A tent was erected and the lane cordoned off around the site, while a police drone and helicopter circled overhead.
On Sunday afternoon, a photographer at the scene told the Mirror: "It all happened so fast. Police have sealed all the roads off. It's fair to say a massive search is underway."
The police were first made aware of a body in the river at about 11.35am on Sunday, the force confirmed.
It said in a statement: "An underwater search team and specialist officers have subsequently attended the scene, entered the water and have sadly recovered a body.
"No formal identification has yet been carried out, so we are unable to say whether this is Nicola Bulley at this time.
"Procedures to identify the body are ongoing. We are currently treating the death as unexplained.
"Nicola's family have been informed of developments and our thoughts are with them at this most difficult of times. We ask that their privacy is respected."
Ms Bulley's family was left "incredibly heartbroken" after a body was found, according to Sky News.
Reporter Inzamam Rashid had been in contact with Ms Bulley's partner, Paul Ansell, on Sunday evening.
Mr Ansell wrote in a text: "No words right now, just agony."
Ms Bulley was reported missing more than three weeks ago, after disappearing while walking her beloved dog, Willow.
She was logged into a Microsoft Teams meeting on her phone, and the phone was recovered on a nearby bench still in the meeting.
Police detectives and divers have been looking for Ms Bulley ever since, in a wide-ranging search operation.
