The MV Farley Mowat, tied up in Shelburne harbour since last September, was at one time the flagship of Paul Watson's Sea Shepherd Conservation Society, a group that made international headlines for its risky confrontations on the high seas.
The rusting, 54-metre ship was seized by a heavily armed RCMP tactical squad in April 2008 for getting too close to the annual seal hunt in the Gulf of St. Lawrence.
It has been the subject of court battles ever since.
The vessel was expected to be scrapped after it was moved from Sydney, N.S., to Shelburne, but it started taking on water late Wednesday and was sitting on the bottom a few hours later.
About 37 litres of fuel has leaked from the vessel, but the Canadian Coast Guard says it has extended a 180-metre boom around the wreck to contain any fluids that might foul the harbour.