The MV Narrabeen and the yacht collided about 2.30pm while the ferry was en route from Circular Quay to Manly.

"Two people were ejected from the yacht and they were able to climb back on after the incident," Detective Chief Inspector Todd Cunningham said on Saturday evening.

Multiple paramedic units, including a rescue helicopter, responded. Three patients were assessed before being taken to St Vincent's Hospital.

A woman with injuries to her leg and a man suffering from chest pain were among those transported.

The other patient was a child who had a leg laceration.

Two men were treated on scene for injuries, including the skipper of the ferry who received bruising to his head and leg, and a man who received scratches to his ribs.

Water police were at the scene, and the crews undertook mandatory drug and alcohol testing.

"Both the master of the yacht and the ferry were breath tested with a negative result," Chief Inspector Cunningham said.

"At this stage it's difficult to tell who was at fault."

Police investigations into the cause of the collision are ongoing.

The 14 people on board the yacht included two children, but the vessel, which has a capacity of 17 passengers, was not overcrowded, Chief Inspector Cunningham said.

The yacht was towed back to Rushcutters Bay, while the ferry continued to Manly, with no apparent damage.

The two people who fell from the yacht into the water were not wearing lifejackets.

Chief Inspector Cunningham reminded the public to be careful on the water over the weekend and heading into summer.

"Whether you're in a recreational vessel or a commercial vessel, you need to be aware, you need to make sure you've got lifejackets and all your safety equipment in case of an incident like this," he said.

"It's important to be aware of what's going on in the water, especially in Sydney Harbour. It's a busy place both day and night."

MV Narrabeen is 70.4 metres long, with a capacity of 1100 passengers.

"Ferry services between Circular Quay and Manly will now move from every 20 minutes to every 30 minutes until further notice," a Transport for NSW spokesman said on Saturday afternoon.

"No other services on the network are expected to be impacted."

It's the third incident involving a Manly ferry in just over three months.

In mid-September, the Ocean Wave vessel hit Manly Wharf at low speed, leaving four or five people with minor injuries.

At the time, the company said it was not clear how the accident happened and crew would be tested for alcohol and drugs.

At the beginning of December, a packed Manly ferry crashed into Circular Quay and two people were injured.

Sydney Morning Herald with AAP