Interislander ferry services have been suspended after a locomotive and a railway wagon fell into Picton Harbour.
No-one was injured.
A KiwiRail spokesperson said the remote-controlled locomotive, which is used in the marshalling yards, and the wagon went into the water about 3.30pm.
The harbourmaster has closed the port, and KiwiRail has begun an investigation.
The spokesperson said a linkspan - the ramp between the land and a vessel - has been damaged, although the wagon was not being loaded on to a ship at the time.
Port Marlborough chief executive Rhys Welbourn said he believes the locomotive and wagon were remotely operated.
He said there does not appear to be much oil spilt, but they are ensuring there is an appropriate environmental response.