Over 100 people are still missing following the sinking of a ferry carrying more than 350 passengers off the coast of Papua New Guinea.

Nearly 250 have been pulled from the water, according to a statement from Australian rescue authorities, but many are feared dead.

Officials at the Australia Maritime Safety Authority (AMSA) said the 47 metre ship, the MV Rabaul Queen, sank about nine nautical miles off Finschhafen off the north coast of the island.

A number of merchant vessels nearby have been diverted to the scene.

The ferry was believed to be on route from Kimbe, a dive spot on the island of New Britain, to the mainland city of Lae.

Ship operators Rabaul Shipping said vessel sank quickly, without sending a distress message.