Auckland councillor Chris Darby tweeted that the Kestrel had broken up in the water.
"Ferry flotsam visible on the Waitemata from my morning ferry following the sudden sinking of the historic Kestrel at its berth overnight," he posted.
Luke Henshall, spokesman for Panuku Development Auckland, said: "I can confirm it has sunk at its berth at Wynyard Berth overnight."
A worker at Wynyard Quarter said he was completely shocked and saddened when he saw the boat.
"We got told at work that it looked like it had sunk so we came to look and there was nothing there, just rope. Now bits and pieces are bobbing on top of the water."
He said the incident was extremely sad.
"There is so much history here."
The man said it could have sunk in the past three hours.
Pieces of the boat can be seen floating to the top of the water surface.
It has been cordoned off by an floating orange cordon.
The cabin top can be seen amid other floating debris.
