A crane has collapsed into Sydney Harbour near the iconic Luna Park. Photo: Luke Bayly/@baylyA crane has collapsed into Sydney Harbour, snapping a large cable which damaged the facade of the iconic Luna Park face, according to witnesses.

Luke Bayly watched the crane toppled from a barge at about 1pm where it was operating near Milsons Point on Sydney’s lower north shore.

“It was a huge bang, it startled me, I thought a bomb had gone off,” he told ABC News.

Fire and Rescue NSW has not been called to the incident. A salvage operation is under way.

The crane, positioned under the Harbour Bridge, was being used to build the new Milsons Point ferry wharf.

A spokesperson for SafeWork NSW said police had alerted them to the incident and inspectors were on their way to the site.

It is unclear at this stage what caused the incident on Waterway Construction’s barge.

Another witness, Daniel Da Silva, whose boat charter agency business is located in the neighbouring marina, heard the crane fall and went to investigate after receiving a call from a tenant.

“I also heard the bang but didn’t know what it was so I jumped in the tender and raced out to see if one of our tenant’s boats had exploded,” Mr Da Silva said.

Charter boat owner Luke Feledy was working on his boat nearby when he heard a “bang”.

“I looked up and there was this huge wave of sea spray caused by the crane crashing into the water,” Mr Feledy said.

“The bang was like this massive crack sound and I am pretty sure something snapped or broke for sure.”

Witnesses also saw a cable snap from the crane as it fell into the water which landed on the entrance to Luna Park.

It’s the latest work site incident to take place on the harbour in several months.

In March, a man was killed was working on a barge when he was struck by a metal object.

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