Auckland's Coastguard is its way to rescue two people aboard a launch in the Hauraki Gulf after its engine burst into fire just before midday.

The pair on board the stricken 12m launch put out a distress call from Onetangi Bay, off Waiheke Island.

A coastguard spokesman said the local coastguard vessel responded along with the police launch Deodar.

A number of private vessels and the naval warship RNZN Hawea also responded to the mayday but were told to turn back before arriving at the scene.

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The blaze had since been put out but a second coastguard vessel was taking firefighters from Half Moon Bay to the stricken vessel to examine the craft for damage and dampen down any hot spots.

Fire Service northern shift manager Megan Ruru said firefighters from Waiheke were also heading to the launch to inspect the blaze.

The damaged launch was expected to be towed back to Auckland by the Coastguard vessel.