The vessel "Chickamauga" sank at the Eagle Harbor Marina on Tuesday.
The Bainbridge Island Fire Department was at the scene before 11 a.m. The Coast Guard and the state Department of Ecology have been notified of the incident.
An observer reported seeing a sheen of oil and fuel on the waters of Eagle Harbor by the sunken vessel. It was unknown how much fuel and oil were on the boat at the time of its sinking.
The Bainbridge fire department was spreading oil-spill booms and absorbent pads to soak up the oil and fuel.
The 59-foot wooden boat was built in 1915, and the identity of the owner of the boat was not immediately available Tuesday morning.