The propeller which fell off the Interislander ferry, the Aratere, has been found in Cook Strait.
KiwiRail contracted the Seaworks salvage company to look for the missing portion of the propeller shaft and the propeller, and it was found on Saturday morning about two nautical miles from Tory Channel at a depth of about 120 metres.
Seaworks executive Steve McIntyre says the propeller was discovered about two nautical miles from Tory Channel, by using sonar equipment and an unmanned submarine.
He says the next step is to work out how to recover the propellor .
That is a risky job as it could fall out of the lifting equipment and be lost, and it's also near the Cook Strait power cable.
Mr McIntyre says the company will probably use its survey vessel, the unmanned submarine and another ship to salvage the propellor.
KiwiRail spokesperson Sophie Lee says it will take about two weeks to prepare equipment for the retrieval, which would also depend on weather conditions.
The propeller weighs around six tonnes and would cost around $200,000 to replace.
The Aratere lost the propeller during a crossing on 5 November, and is expected to be out of service for six months.
KiwiRail chief executive Jim Quinn says the company has narrowed its options to a few ships in Europe and Asia that are capable of taking passengers and roll-on-roll-off freight.
Mr Quinn says vessels put on a shortlist will be inspected, but any temporary replacement picked won't be in service until January at the earliest and the cost of chartering it is not yet known.
KiwiRail is asking the Government to help pay some of the costs of replacing the Aratere, though it does not yet know what went wrong with the ferry or how much money is needed.
The Aratere underwent a $53 million refurbishment in 2011, but just months later was out of action for two weeks following major engine failure.
The troubled ferry was pulled from service in May this year when its radar system failed and the starboard stabiliser needed repairing.