The Interislander's Aratere ferry was successfully tested overnight but remains banned from commercial operations until Maritime New Zealand (MNZ) gives the go-ahead.
MNZ yesterday ordered operator KiwiRail to stop operating the ferry until mechanical system failures were resolved and it was safe for passengers and crew.
The order came after the Wellington-bound Aratere suffered reduced power in the Tory Channel in the Marlborough Sounds on Tuesday night - the second time in a month the newly refurbished ship had had mechanical problems.
A KiwiRail spokeswoman this morning said a successful test was held overnight but there was more work to be done.
In the meantime, passengers and freight customers booked on the ferry had been contacted and alternative arrangements made.
"Our other ships, Arahura and Kaitaki, are taking as much of Aratere's surplus as possible," she said.
"It's low season still so numbers are relatively low."
KiwiRail's chief executive did not want to give any time indication as to when it would resume commercial operations, she said.
"The key thing for us is to make sure that the ship is operating properly and safely.
"For us, getting Aratere fixed is the key priority and we will deal with all our regulatory authorities - we have at least three - openly and transparently and co-operate and assist with whatever investigations they want."
A MNZ spokeswoman told APNZ inspectors were aboard the vessel outlining the steps which needed to be taken before the ferry could resume operating.
It was hoped sea trials would be held today.
"Getting it right is the key thing so we're just keeping going through the process, making sure that each thing is being ticked off along the way," she said.
Transport Minister Steven Joyce supported the decision to halt sailings.
The Aratere returned to service in September after a five-month, $52 million refurbishment in Singapore that added a new bow and 30 metres to its mid-section, boosting its capacity.
KiwiRail said the problems were not directly linked to the ship's recent extension.