Gerald Phillips (42), of Dynes Transport Ltd, said he was driving a 20m truck-and-trailer unit from Port Chalmers to Dunedin about 9.35am when he saw the Toyota Starlet swerve to miss a white "people mover" vehicle at Blanket Bay.
The Toyota spun out of control and went into the harbour.
Mr Phillips, who was returning to Dunedin after picking up a load of empty pallets from Port Otago, had to brake heavily to avoid the white people mover, which carried on towards Port Chalmers.
He said he narrowly avoided a "scary" head-on collision.
He stopped and jumped into the harbour, where the 23-year-old student was battling to undo his seatbelt.
Mr Phillips opened the driver's door, pulled the front seat forward and helped the disoriented student out of the rear seat.
The student told Mr Phillips there had been a few "tense" moments when he was upside down and unable to release the seatbelt.
Senior Constable Lindsay Turner, of Port Chalmers, said the people mover vehicle was almost completely on the wrong side of the road.
The student had tried to avoid the vehicle by driving on the road layby, but then over-corrected and lost control of the car.
Snr Const Turner said the white vehicle had earlier been travelling with a group of other vehicles, and he appealed for witnesses to provide information.
