A vessel carrying some 120 migrants and refugees was to be towed to Souda Bay on the Greek island of Crete after issuing an SOS signal.
Coast guard officers responded to the call for help on Thursday morning, which came 28 nautical miles off the coast of Hania in the north.
According to local authorities, three Ukrainian nationals who were on the vessel have been arrested on charges of migrant smuggling.
Once the passengers are towed to safety, they will be taken to an indoor sports arena for processing, Hania Mayor Tasos Vamvoukas told ERT. He added that there was no information so far regarding their nationalities.
Meanwhile, authorities on Thursday reported the arrival of nearly 100 migrants and asulym-seekers over the past three days on the eastern Aegean island of Lesvos alone, saying that the total number of migrants trapped on Greece's islands has reached around 9,600.