Two passengers are missing after a ferry sank in Indonesia.

The vessel named Muchlisa was operating on the Balikpapan–North Penajam Paser route when it sank in the waters off Penajam, East Kalimantan, on Monday, May 5.

Authorities confirmed that the incident occurred some 200 metres from the pier as the vessel prepared to dock at around 3:20 pm.

Muhammad Sukadi Kuncoro, Head of the Regional Disaster Management Agency for North Penajam Paser Regency, said the ferry's left engine failed to function during the docking process.

Upon inspection, the crew discovered a broken propeller axle and requested assistance from Ferry 3 Anugerah to ground the vessel to prevent it from sinking.

The authority added: 'The efforts to ground the vessel were unsuccessful, and the ferry Muchlisa ultimately sank at the scene. Police are currently gathering information from several witnesses, including the ship's helmsman and captain.'

Dramatic footage shows the vessel gradually being swallowed by the water as locals can be heard shouting in fear.

The ferry was carrying 44 people, including 23 passengers and 21 crew members. Search and rescue teams continue to look for the two missing individuals.

The sinking also affected several onboard vehicles, including two motorcycles, eight passenger cars, and eight large cargo trucks.