The salvage of a 20m launch which beached off Mount Maunganui after hitting rocks last night has been delayed until tomorrow.

Earlier crowds had gathered to watch a salvage team haul the vessel off rocks near Rabbit Island.

Tauranga Coastguard operations manager Simon Barker said a distress signal was received from the boat about 10.30pm.

A pilot boat was nearby and went to help the crew of the sinking vessel.

When the pilot boat arrived, the three people on board had already got into an inflatable dinghy.

The boat, called Paradise, has a 1.5 metre hole in its front hull and is beached about 30m offshore from Marine Parade.

Sergeant Craig Madden said the boat, believed to be worth about $400,000, had partially sunken into a deep hole.

He said they hoped to attach large nylon straps to the rear of the boat and drag it out backwards.

A large truck will be used to haul the boat out of the water.

Police had wanted to salvage the boat today but "issues" meant the operation had to be delayed until tomorrow.

Police would keep an eye on the boat overnight to make sure no one helped themselves to the launch and its contents, Senior Sergeant Glenn Saunders said.

An investigation into the incident is continuing.