Okiwi Bay Voluntary Rural Fire Force fire chief Ian Montgomery said details were sketchy but the collision happened near where boats were moored in the harbour.
"It was very, very dark and the cloud cover was quite low last night, " he said.
Montgomery said the alarm was raised by one of those injured on board the crashed vessels.
Firefighters helped lift the most seriously injured person out of a boat into a waiting helicopter.
He said he didn't know what type of boats were involved but neither sank in the collision. There were only three people believed to be on board the vessels when the accident happened.
"It was quite a dark night and it was a pretty busy scene," he said.
Police say the seriously injured person initially survived the on-water smash but died on the way to hospital.
A spokesperson from the Nelson Marlborough Rescue Helicopter said the service was called to the inlet to fly a critically injured person to Nelson Hospital. There were no further details available.
Two other boaties were also injured.
An ambulance spokesman said one person suffering moderate injuries was taken to Wairau Hospital in Blenheim for treatment.
Police say they are working to determine the circumstances surrounding the marine incident.
