The crane, owned and operated by Smith Crane and Construction, was working from a modular barge system in Fresh Water basin, Milford Sound.
It is undertaking the civil construction work as part of the Milford Sound Development Authority's $6.06 million harbour redevelopment.
Milford Sound Development Authority operations manager Andrew Welsh said the Kobelco 7055 crane tipped over on Wednesday and part of the 33m boom caught on a pile, preventing the entire crane from going into 4m deep water.
The driver escaped uninjured from a near miss.
Mr Welsh, who said he was beside the barge at the time of the incident, said the crane started to tip to the port side of the barge "and for no apparent reason crashed on to its side".
"The driver was very lucky and although there is significant damage to the barge and crane, we are relieved that no contractors were injured."
A salvage operation was planned and managed by C and C managing director Tim Smith, with advice from Maritime New Zealand and Marine Vehicle Solutions Ltd, Naval Architects.
Following successful removal of the crane boom and stabilising the barge, the crane was winched back on to its tracks yesterday morning, Mr Welsh said.
"Environment Southland staff have been on site throughout the salvage in case of oil or fuel leaking from the crane.
"Following the salvage of the crane there appears to be no significant oil spill threat.
"The accident will result in a delay to the construction works, but it is not expected to affect the summer season."
Department of Labour and Maritime NZ staff were investigating the accident, Mr Welsh said.
Milford Sound Development Authority board chairman Jeff Grant said the construction programme was timed to cause minimal disruption to visitors and operators at Milford Sound.
It was the most significant investment by the authority since the original tourism development from 1989 to 1991.
Environment Southland announced it stood down its oil spill response team from Milford Sound yesterday, after a "successful salvage operation" in the morning saw the capsized crane righted and stabilised on its barge.
