Twenty-six people were aboard Torea, an oyster boat that was on a recreational charter in Foveaux Straight, at the bottom of the South Island.
With Torea taking on water, the skipper ran the vessel aground on Ruapuke Island.
The 23 passengers and three crew all managed to off the boat safely.
“That’s a lot of people to get off a boat, no one injured, couldn’t have asked for a better outcome really,” Nathan Smith, from the rescue crew, told TV3
The boat remains grounded.
The stretch of water has claimed 14 lives in recent years, with the Easy Rider and Kotuku going down in stormy conditions.
Today’s incident occured in calm weather.
There could be up to 3000 litres of diesel on board, with some oil already leaking into the sea.
An oil slip team from Environment Southland is assessing the situation.
The Transport Accident Investigation Commission and Maritime New Zealand are making preliminary inquiries.