  A detailed study of the effect of the $\eta$-nucleus final state interaction
(FSI) in the $p d \to ^3$He$ \eta$ reaction close to threshold is presented.
The FSI is incorporated through a T-matrix for $\eta ^3$He elastic scattering,
constructed using few body equations. This T-matrix accounts for off-shell and
binding effects in $\eta$-nucleus scattering. The energy dependence of the data
on the $p d \to ^3$He$ \eta$ reaction near threshold is reproduced only after
including the FSI. The off-shell and binding effects in $\eta ^3$He scattering
are found to be important. Given the uncertainty in the knowledge of the
elementary $\eta$-nucleon interaction, the sensitivity of the $ p d \to ^3$He$
\eta$ cross section to different prescriptions of the elementary t-matrix,
$t_{\eta N \to \eta N}$ is also discussed.
