A semi-submerged boat is making its way back to shore after it started taking on water about 5km out to sea near Kaikoura.
Tasman Police Acting Senior Sergeant Julian Lewis said there were two people on board - including one 64-year-old man - who were both wearing life-jackets.
The boat started taking on water out to sea from Ward, north of Kaikoura, and the stern of the boat was now underwater.
It is not yet known why the boat started to sink.
The boaties were managing to keep the water at bay and were slowly heading for shore, Mr Lewis said.
Emergency services received the call-out about 1pm.
"At the moment they're managing to keep the water at bay, they're under slow power heading back towards shore and rescue is underway in relation to getting fishing boats in the area to head out and assist and babysit them back in," Mr Lewis said.
"We've got no idea at this stage [what caused it]...The stern is under but they're still under their own power."
The Westpac Rescue Helicopter from Wellington was initially on its way to the incident but has since been stood-down, he said.
The size of the boat is not known.