The Antigua-Barbuda-flagged EMS Majestic began to sink with seven crew on board in the English Channel when it was being towed to safety.
The UK Coastguard received a Mayday call at 7.09pm on Sunday from a cargo vessel which was taking in water in the Dover Strait.
EMS Majestic reported that they had seven crew on board and were taking on water and sinking 13 miles south east of Eastbourne. A number of vessels transiting the area responded to Mayday Relay broadcast to provide assistance as required.
Maritime and Coastguard Agency (MCA) rescue helicopters based at both Lee on Solent and Lydd have been sent to the scene along with Eastbourne RNLI lifeboat. EMS MAJESTIC received assistance from the tug, THOR FRIGG and is currently under tow to Southampton.
The EMS Majestic was being towed to a safe haven by the tug Thor Frigg. The cargo of the 90m-long ship has not been disclosed.
Two "non-essential" crew members were airlifted from the vessel by Coastguard helicopter for safety reasons, a Coastguard spokesman added.