Hydraulic oil has spilled into the Sulphur Point area of Tauranga Harbour.
Bay of Plenty Regional Council regulatory compliance manager Stephen Mellor said the spill was bought to council's attention at 10.15am today.
"We understand the spill was the result of a failed hydraulic hose for a straddle lift operating at the container terminal," Mellor said.
Six regional council staff are currently responding to the spill.
Oily water entered the stormwater network and eventually the harbour via a stormwater drain.
Oily water is still being discharged into the harbour but booms have been deployed around the drain to contain the spill.
Land-sea booms, as well as absorbent booms and pads, were being used in the clean-up.
Port of Tauranga staff were also responding to the spill and were working to recover oil from the contaminated stormwater in the retention pond via a sucker truck.
Port communications manager Rochelle Lockley said she was waiting for an update from an environmental team who were currently onsite.
"Until I have heard from them there's not much more I can add," Lockley said.
"I understand the spill is well-contained and the priority is making sure it doesn't spread."
She said at this stage she could not comment on where the spill had originated.
Bay of Plenty Regional Council senior compliance officer John Morris said the spill was "well contained" despite oil escaping overnight before the clean-up began.
He said the AIMS Games sailing teams had been advised to stay out of the water and had been happy to comply.
He said the spill was "very low risk" and expected it to clear by 10pm.