More than 35 litres of oil is in Shelburne Harbour after a ship sank at the town wharf.
The MV Farley Mowat sank early this morning after taking on water yesterday afternoon.
The Coast Guard is setting up 600 feet of containment boom to collect the pollutants.
An oil sheen has spread from the wharf to the shipyard.
The vessel has been in Shelburne since last fall after it was evicted from the waterfront in Lunenburg.
The Coast Guard says it could take days to weeks for the clean-up process to be complete.
There are no plans to raise the vessel at this time.