The Portland Bay unloaded a cargo of cement at Port Kembla and returned to sea early on Monday. It was carrying nearly 1000 tonnes of fuel oil.

It is understood the turbo fan in the ship's main engine blew up on Monday morning. It left the ship in a precarious position as it was buffeted by eight-metre seas and 42-knot winds.

On Monday morning the plan was to airlift eight non-essential crew from the ship.

The Australian Maritime Safety Authority and the Westpac Life Saver Rescue Helicopters partnered to get to the stricken ship but after test winches deemed the rescue operation too risky.

On Monday afternoon the ship master was confident of being able to repair the engine once the boat was in safe, deep water.

But circumstances demanded that decision was reconsidered.

READ MORE:

A number of tugboats are involved in the rescue mission, including one with heavy duty emergency equipment from Newcastle.

However, the efforts to move the 170m cargo ship to deeper waters were suspended on Monday night after lines used to pull the vessel snapped.

However the Port Authority of NSW said the ship was now in a sheltered, safe position and both anchors deployed and secured. The 21 crew on board are safe.

In a statement, the port authority said: "With 11-metre swells experienced last night, an operational decision was made to suspend further attempts to tow the ship out to sea.

"The crew of the MV Portland Bay has been unable to make the repairs required on board and the incident team's preference at this time is to bring the ship into Port Botany when the weather abates so repairs can be undertaken in the safety of a berth and port environment.

"Based on current weather forecasts, it is expected that the ship will remain off shore until at least Wednesday."

On Tuesday, maritime officials said it plans to the stricken ship stable in its present location off Cronulla until the weather allows it to be towed into Port Botany.

A third tug has arrived from Newcastle to help with the rescue operation.

An update from the Port Authority of NSW on Tuesday afternoon said the multi-agency response team it was leading "is preparing for slow and steady progress in challenging conditions as weather continues to hamper the response to move the MV Portland Bay after she lost power south of Sydney".