Historic 20-metre wooden pilot cutter MV Goondooloo has sunk in the D’Entrecasteaux Channel off Middleton after taking on water.
The 1958 vessel was sailing from Port Huon to Hobart for the Wooden Boat Festival when it suffered a mechanical failure near Whale Boat Rock.
The two crew members, a 50-year-old woman and a 59-year-old man from Hobart, alerted authorities around 3:45pm on Wednesday.
Tasmania Police Acting Inspector Danny Jackson said the crew managed to raise the alarm using a marine radio, an EPIRB and a mobile phone.

He said the historic vessel, which was previously a pilot boat in Sydney Harbour, “quickly” filled with water and sank.
The pilot cutter was one of only three of its kind.

Sharing the Pulse Tasmania story of the sinking on Facebook, the owners “unfortunately” confirmed the Goondooloo “is the vessel in question” and thanked the police and well-wishers.
Co-owner Deb Ludeke described the ordeal on ABC Radio on Thursday morning.
“I went and inspected the engine room and came back up and we were on top of the world, so excited,” she said.
“And next thing we knew the steering got bad and I went back downstairs and I was knee-deep in water. The generator was pumping water in from the side of the boat. We just couldn’t contain the flow.”

“We got through to the police. They actually had a dive team in the area that were doing training, so they were there very quick.”
Inspector Jackson said the crew was uninjured and wearing life jackets. They also had the right safety gear on board when police rescued them.
“The regular communication with police enabled a swift and effective rescue operation,” he said.
“This is a timely reminder for those boating to ensure they are wearing their life jacket, take the proper safety precautions and remember to let someone know where you are going and what time you can be expected back.”

The Wooden Boat Festival on Hobart’s waterfront will be the biggest celebration of wooden boats and maritime culture in the Southern Hemisphere, according to organisers.
The free event will run over four days from Friday.