There was a loud impact and noise before the ferry off a coast of South Korea began sinking, a passenger who had been rescued from the vessel told YTN news television.
One person has been found dead in the ferry wreckage, according to a coast guard official.
The president of South Korea, Park Geun-hye, earlier ordered all available vessels and special operations divers to the rescue operation.
More top news
Medical staff who helped during the Westminster terror attack have received a royal thanks for their life-saving efforts.
Colin Gregg, the son of the founder of the Greggs bakers chain, has been jailed at Newcastle Crown Court for 13 and a half years.
Khalid Masood was killed by a single gunshot to his chest, after the terror attack which claimed the lives of four people, an inquest heard.