Thousands of distressed passengers are onboard a cruise ship bound for New Zealand that has broken down and is drifting off the coast of Australia.

The Norwegian Star is adrift in the Tasman about 50km from Melbourne with more than 2000 people aboard.

A passenger onboard the ship told The Age some people were crying.

"We're stuck in the middle of the ocean. It's scary," the man told The Age.


Steve T Raney posted on Facebook saying: "WE have NO engines for propulsion!!! WE are afloat in the ocean!!!"

WE have NO engines for propulsion!!! WE are afloat in the ocean!!! All systems of the ship regarding safety and AC etc...

Posted by Steve T. Raney on Thursday, 9 February 2017

Raney said on Facebook that passengers were safe and comfortable and tugboats were on their way to tow the Norwegian Star back to Melbourne.

"We are returning to Melbourne for 4-5 days as soon as they can get boats out here to us to pull us in. This just announced by the ship's captain," he said.

A spokeswoman for operator Norwegian Cruise Lines said the ship's azipod propulsion system experienced a technical malfunction in the early hours of this morning.

"The ship has full power and all onboard services are fully operational. All guest amenities remain open and available.

"It is not a safety issue. All our guests are perfectly safe on board."

The spokeswoman said arrangements have been made to tow the 91,000-tonne Norwegian Star to shore and the company is "optimistic" to have it back to port in Melbourne in the next day or so.

"It will undergo a few days of repairs before it goes to New Zealand," she said.

The ship was expected to berth at Port Chalmers, Dunedin on February 13.

Norwegian Cruise Line said in a statement that all guests onboard are being provided a full refund, as well as a 50 per cent future cruise credit.

"Norwegian Cruise Line sincerely extends its deepest apologies to guests for the inconveniences that they have encountered.

"We thank our guests for their understanding and patience in this very unusual and unprecedented situation. While very rare, mechanical equipment malfunctions do occur and we assure our guests that our dedicated team on board is working tirelessly to deliver the absolute very best guest experience possible during this adjusted cruise."