A $4 million state-of-the-art charter boat sank at its mooring at Port Douglas, with police not ruling out the possibility of foul play.
The Haba Dive company's only Reef vessel, MV Evolution, a multi-million dollar wave-piercing catamaran was still partially submerged last night.
Firefighters, police and ambulance crews were called to the scene at 12.30am yesterday. No one was on the boat at the time.
It is understood a passerby raised the alarm.
Haba Dive has been owned and operated by Port Douglas residents Bruce Funch and Josann Reynolds since 1998.
The award-winning tourist operation has hosted celebrities including, Mick Jagger, Jerry Hall, Jerry Seinfeld, Sean Penn, Glenn Close, Nick Nolte, John Cusack, and Harry Connick Jr.
Haba Dive general manager Stephen Dennis said yesterday had no idea what caused the 29m vessel to sink.
It is believed a small amount of diesel leaked into the inlet before being cleaned up by fire and coastguard volunteers. Divers sealed vents to stop further leaks.
Mossman police Sen-Constable Paul Tulacz said police investigations were continuing. Marine Safety Queensland also is investigating the incident.
The vessel is expected to be salvaged within the next day.
The incident has thrown the operation of the long-standing family business into doubt.
Mr Dennis said the company did not know how long the vessel would be out of action, adding that staff were "very upset".
He said the priority had been to minimise any potential harm to the environment, which he said had been achieved.
The MV Evolution was commissioned in 2005.
For Mr Funch, it is the second time in three years one of his boats has sunk.
His $1 million private boat, which he called home, sank during an overnight fishing trip with his son and son's girlfriend in January 2008.