A Manly ferry collided with a boat in the middle of Sydney Harbour with "several people were thrown from the yacht" into the harbour.
The yacht was seen being towed by one boat and escorted by another. It's mast smashed with the sail being dragged through the water.
The ferry was seen with scratches on the starboard bow.
The two vessels collided at Fort Denison, situated in the middle of the harbour after 2.40pm.
A NSW Police spokesman confirmed there had been "no fatalities".
"Ambulance and police are currently on scene," he said.
"There are no people in the water."
A Transport NSW spokesperson said the ferry was en-route from Circular Quay to Manly.
"Several people were thrown from the yacht, but have since been retrieved from the water," they said in a statement.
"It is understood there were no serious injuries sustained.
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"The crew are undertaking mandatory drug and alcohol testing."
Three people were taken to hospital for treatment.
Ferry services between Circular Quay and Manly will now move from every 20 minutes to every 30 minutes until further notice.
No other services on the network are expected to be impacted.