The MV Blue Puttees ran aground while departing Port aux Basques for North Sydney just after 8:30 a.m. Wednesday.
Marine Atlantic said the vessel has been stabilized and secured at its current location.
The ship hit a dock at the site of a former fish plant and nudged a small building.
The Blue Puttees was carrying 398 passengers and 91 crew members, according to Marine Atlantic.
All passengers remain stranded aboard the vessel.
There were no injuries reported, and there is no indication of significant damage at this point.
A Marine Atlantic spokesperson says when the tide gets higher, a tugboat will bring the ship back to port.
Passengers will be able to depart at that time.
Marine Atlantic says it has contacted regulatory authorities about the incident.
The investigation is continuing.