A massive cargo ship has lost at least 40 containers overboard in heavy seas off the NSW shoreline near Sydney.

The Australian Maritime Safety Authority said the container ship APL England had problems with its propulsion system during rough seas about 70km southeast of Sydney about 6am on Sunday.

The ship's power temporarily went down and within minutes the vessel began to roll heavily, causing container stacks to collapse and dozens of containers to fall overboard.

An AMSA spokesman said crew on-board the APL England had told Australian authorities that at least 40 containers were lost overboard and 74 containers were damaged.

"Six containers are reported to be protruding from starboard side and three from the port side of the ship," the spokesman said.

"AMSA intends to task one (of) our challenger jets to proceed to the area to look for containers and debris and to inspect the ship for any signs of damage or pollution."

The APL England, which is Singapore-flagged and was travelling from China to Australia, was last night heading north up the coast of NSW to avoid heavy weather.

AMSA said it was unknown whether the shoreline would be impacted from the lost containers.

"AMSA is working with NSW Maritime to monitor the situation and develop an appropriate response," the AMSA spokesman said.

"The Australian Transport Safety Bureau has been notified."

Originally published as Rough seas: Cargo ship off Sydney loses 40 containers overboard