Passengers have been given lifejackets and are being checked over.
Interislander general manager Duncan Roy said the vessel, with 47 people on board, departed Picton at 9.45pm Friday.
It ran aground following a steering failure.
"It was a freight only sailing with eight commercial vehicle drivers and 39 crew on board. There are no injuries and the vessel is watertight.
"The Picton Harbourmaster is on board and we are working with him to move the vessel back to Picton."
Maritime New Zealand said in a statement that the crash occurred about 2.8km north of Picton.
"The vessel will be refloated as tidal conditions allow."
According to MetService, the tide was going out. It would be at its lowest around 2.20am.
High tide was expected around 9am.
Maritime New Zealand would be investigating the cause of the grounding, the statement said.
Nelson MP Rachel Boyack said it would have been a "pretty frightening" incident for those on board.
"I have heard that the Harbourmaster is on board doing checks but I'm trying to find out further information. Obviously it's a pretty concerning incident."
Boyack said she had been advised everyone on board had been given a lifejacket.
Hutt City councillor Brady Dyer posted about the incident on X, saying: "Looks like the Interisland ferry Aratere has (run aground) shortly after leaving Picton this evening! Hope everyone on board is ok!"
A man whose father was on board told the New Zealand Herald he understood the ferry had hit a bank. He said all on board were safe.
Marinetraffic.com showed the ferry was near Pine Bay and not moving just after 11pm Friday. It was about half an hour out of Picton.
The vessel's status was "aground", the website said.
St John Ambulance said it was notified of the incident at 10.04pm.
"We ... are currently on scene with two ambulances, one first response unit, one manager and a Major Incident Support Team. There are no reports of injuries."
The Maritime Union said the vessel had run aground at Pine Bay.
The union would release further information on the incident when it was available.
Transport Minister Simeon Brown said in a social media post that he had been advised there was no indication of injuries, danger to life, or danger of oil polluting the marine environment.
"The vessel is watertight. Both KiwiRail and Maritime NZ are actively dealing with the situation."
In January 2023, the Interislander ferry Kaitiaki broke down in the Cook Strait and ended up drifting, resulting in a mayday call.
Tug boats had to escort the ferry, which had 880 people on board, to Wellington.
A report later found the breakdown was partly due to KiwiRail not replacing critical engine parts.
Maritime NZ has since filed a charge against KiwiRail under the Health and Safety at Work Act in relation to the incident. The maximum penalty is $1.5 million.
Earlier this year, all passenger sailings on the Interislander's Kaiarahi ferry were cancelled for several days due to a mechanical fault.
Meanwhile, a project to build two new ferries and redevelop the ports was canned by the coalition government after spiralling costs meant it was no longer economically feasible to proceed.
The project would still be $1.5 billion in the hole after 2050, documents revealed.
More to come ...
