Three people including a child have been saved after a boat hit rocks and started taking on water in the Bay of Islands overnight.

Coastguard operations duty officer Johnny Clough said three people and two dogs were on board the 8m craft when it foundered on rocks off the northern tip of Urupukapuka Island just after 1am.

A distress beacon was set off which sparked a rescue operation involving coastguard and another nearby vessel.

When the rescue boats arrived at the remote northern location the stricken vessel was no longer on the rocks and floating.

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However, one person on board had suffered a minor head injury when it came to an abrupt halt on the rocks.

Clough said a young child on board was transferred to the coastguard vessel which shadowed the damaged craft into Parekura Bay.

Conditions were calm and flat at the time of this morning's rescue.