Port Otago and Otago Regional Council staff responded to the sinking of the boat yesterday.
The boat, 18m long and weighing 60 tonnes, has been unattended for several years.
Deputy harbourmaster Pete Dryden said booms had been placed around the ship to protect the environment, and the oil spillage was being cleaned up.
It was now up to the ship’s owner to decide whether to re-float the ship, Mr Dryden said.
"It is too soon to tell what caused the ship to sink."
Mr Dryden said Port Otago staff had been "very proactive" in assisting the cleanup.
A barge would be sent out today to help with cleaning up the oil.
Mr Dryden said the ship had been at Carey’s Bay for nearly 10 years.
Asked about the boat’s state, Mr Dryden said the sinking was a "timely reminder for owners to check the integrity of their vessels".
Mr Dryden declined to name the owner of the vessel.
"It is a private vessel, so it is now up to the owner to decide what happens next."
