A ferry servicing the Cook Strait between New Zealand's North and South Islands has run aground in a late-night accident.

The Aratere ship, part of the government-owned Interislander fleet, veered into a cliff face just north of its departure harbour of Picton, on the South Island, at about 9:45pm Friday local time (7:45pm AEST).

Interislander general manager Duncan Roy blamed a "steering failure" for the accident, with navigation websites showing the Aratere turning gradually into rocky land rather than heading straight into the Marlborough Sounds, bound for Wellington.

He said there were no injuries and the ferry remained watertight.

"It was a freight-only sailing, with eight commercial vehicle drivers and 39 crew on board," he said.

"The Picton Harbour Master is on board and we are working with him to move the vessel back to Picton."

The 47 crew and drivers spent the night onboard the ferry, which had power and supplies, but were told to wear life jackets in case the situation worsened.

Transport Minister Simeon Brown said there was "no indication of injuries, danger to life or danger of oil pollution to the marine environment".

A refloating operation was due to take place on Saturday morning, however, it had to be delayed until the evening's high tide to allow for more time to prepare the ship.

The eight drivers and 12 of the crew members who spent the night onboard the ship have since disembarked and are travelling back to Picton.

The debacle is the latest in a string of problems for the Interislanders, once a much-loved Kiwi institution but now synonymous with blunders.

The Aratere is a $NZ106 million ($98 million) Spanish-built ship dubbed "El Lemon" due to its many issues.

Both the Aratere and its sister ship, Kaitaiki, lost power on sailings last year.

In a dangerous January 2023 incident, the crew of the Kaitaki handed out life jackets to hundreds of passengers as it drifted towards the south coast of the North Island in high winds before power was restored.

In November last year, another Interislander — the Kaiarahi — was out of action for some time after striking a Wellington wharf, leaving it with a hole in its hull.

The previous government, led by Jacinda Ardern, hoped to replace the fleet with rail-enabled new ferries and wharves, but the current conservative government axed the project on coming to office, citing major cost blowouts.

This week, Mr Brown told a parliamentary select committee the government had been "highly unimpressed" with the maintenance of the ships by KiwiRail, New Zealand's government-owned rail operator which also operates the Interislander ferries.

The route is a key link between New Zealand's two biggest islands, with several sailings each day between Wellington and Picton.

KiwiRail run almost 4,000 services a year, carrying more than 800,000 passengers, 250,000 cars and over $NZ15 billion ($14 billion) worth of freight.

The route is also serviced by private operator Bluebridge.

AAP/ABC