The iconic Chinese Junk Shaolin has fallen victim to Cyclone Yasi as it lay deep within Dickson Inlet with dozens of other boats who headed for shelter last week.

The boat was undergoing extensive work to prepare it for commercial use prior to the storm, and was apparently secured by experienced people with all precautions being taken.

Local resort manager, Toni Bennett, said her family will be shocked by the news of Shaolin's sinking.

"We've had some great times on Shaolin. My husband had his 50th birthday on it, my daughter's 30th birthday was a full moon cruise on Shaolin, and we chartered it for our family to go to Low Isles. Many of the had their first snorkelling experience off that boat.

"It was wonderful in terms of providing a very special experience," she said.

The cause of the accident is not yet known and it is not yet established whether the Shaolin is recoverable.