The Kestrel ferry, a former Tauranga restaurant, has sunk overnight at its berth in Auckland.
Auckland councillor Chris Darby tweeted that the Kestrel had broken up in the water.
"Ferry flotsam visible on the Waitemata from my morning ferry following the sudden sinking of the historic Kestrel at its berth overnight," he posted.
Luke Henshall, spokesman for Panuku Development Auckland, said: "I can confirm it has sunk at its berth at Wynyard Berth overnight."
A worker at Wynyard Quarter said he was completely shocked and saddened when he saw the boat.
"We got told at work that it looked like it had sunk so we came to look and there was nothing there, just rope. Now bits and pieces are bobbing on top of the water."
He said the incident was extremely sad.
"There is so much history here."
The man said it could have sunk in the past three hours.
Pieces of the boat can be seen floating to the top of the water surface.
It has been cordoned off by an floating orange cordon.
The cabin top can be seen amid other floating debris.
CEO of Auckland Seaplanes Chris Sattler said he was alerted to the incident early this morning.
"I got a call this morning just after six this morning informing us the Kestrel had sunk overnight.
"At that stage there was no debris in the water and there was no danger to navigational safety in the harbour," he said.
"They have now cordoned off the area where the Kestrel has sunk and they are retaining all the parts you see floating there."
Mr Sattler said it was a huge loss to the trust which was looking to restore it.
"It is a bit of a sad story because they were looking to restore the Kestrel but it was just a bit too expensive for the trust so they were waiting for something positive to happen and unfortunately I didn't happen."
He said his business would continue to operate today.
General manager of Panuku Development Auckland Marinas, Tom Warren, said it was unclear what had caused the Kestrel to sink.
"We are still looking into that at the moment. We were told at about 5.50 this morning and we are now just working through how to deal with the challenge that we have here."
He said it was also unclear what time the Kestrel had sunk.
"We will be reviewing out CCTV cameras to find that out."
He said he believed no one had been on board when it sank.
Mr Warren said the area had been bunded - a cordoning method which captures both debris and hydro carbons which may leak into the water.
"We have bonded the area so we will contain any hydro carbons. The Kestrel was supposedly meant to be completely clear of any oil so there should be none of that.
"The [cordon] will hold the debris that are there and once the Kestrel Preservation Society has contacted their insurance assessors they will start to clean up the debris that is there."
Mr Warren said there was no obvious evidence as to what had caused the boat to sink.
He said the plan now was to contain the debris and then work on dealing with the wreck and how it is removed.
"We are not sure on that yet, it is up to the Preservation Society's insurance company to advise on that.
"We will make sure that whatever debris is there will be removed."
The area where the Kestrel sank was 6 to 7 meters deep and the boat was sitting on the bottom of the marina floor.
Mr Warren said the sinking had come as a surprise and the Preservation Society were just coming to terms with what had happened.
"It is definitely a loss for Auckland and for the Preservation Society."