The cause of the incident is not yet known but media reports said it had overshot the runway while attempting to land.
Only the top half of the plane was visible in a photo obtained by RNZ Pacific, and small boats boarded with people were scattered around it.
The aircraft was reportedly flying from the island of Pohnpei in Micronesia to Port Moresby, the capital of Papua New Guinea, stopping at Micronesia's Weno island on the way.
Remarkably, it said there were no serious injuries.
According to Air Niugini media personnel, the management is now in a crisis meeting. The airline is making all efforts to ensure the safety and immediate needs of our passengers and crew.
In 2013, all 101 passengers aboard a Lion Air flight that overshot the runway at Denpasar in Indonesia and landed in shallow water were similarly rescued by boats without casualties.
Papua New Guinea officials say investigators from the country will head to Micronesia.
"We're trying to arrange a team to go there but I can not give you any more information because I simply don't have it", a spokesman told AFP.
A flotilla of small boats rescued all 47 passengers and crew from an Air Niugini flight that crashed into the sea short of the runway at an airport in the tiny South Pacific nation of Micronesia on Friday, the airport's manager said.
Air Niugini is PNG's national carrier which services domestic network and worldwide routes across Australia, Asia and the Pacific.
Mr Kaumu said the passengers are now being rescued by locals.