Global Spill Control identified both an impervious and an absorbent oil boom at Banana Alley after a derelict party boat on the Yarra River was destroyed in a suspicious fire.
About 30 firefighters attended the blaze at the Banana Alley Wharf at about 2.30am but the 20m boat was gutted and the remains have since sunk.
Specialist marine firefighters fought to extinguish the fire and MFB spokeswoman Heather Stockton said they were able to prevent two other boats from being damaged.
Pollution booms have been put in place around the sunken boat and EPA and Melbourne City Council officers will attend the scene this morning.
Police are investigating the cause of the suspicious blaze.
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