A fishing vessel has run aground at the tip of Farewell Spit, at the top of the South Island.
The Rescue Co-ordination Centre (RCC) said one person was rescued before the vessel sunk early this morning.
It was alerted to a vessel in distress about 4am, after it started taking on water. The fishing vessel then grounded on Farewell Spit and had since sunk.
The skipper was the only person on board at the time and was rescued by Coastguard shortly before 8.30am.
He was taken back to Nelson about 10am for medical assessment.
Multiple agencies are now working to salvage the vessel.
RCC said it is understood there was about 1000 litres of oil on board. The Harbour Master is working to remove the oil from the vessel. None is reported to have been spilled.
Rosie Musters of Coastguard Nelson said the skipper was very shaken up when he was rescued.
"I think if we had been half an hour later, the guy would have been swimming," she said.
"He was very, very lucky to be found, just before his boat went down."
It took two hours for Coastguard to reach the vessel, which is 40 miles across Tasman Bay from Port Nelson.
It was not known what had caused the vessel to run aground.
Farewell Spit is managed by the Department of Conservation and was established as Ramsar wetland site in 1976.
It is a critical stopover for around 20,000 migrating wader birds, making it an internationally significant site for bar-tailed godwits, pied oystercatchers, variable oystercatchers, banded dotterel, red knot and ruddy turnstone.