A car belonging to Leo Lipp-Neighbours is raised from in the harbour beside a wharf at Port Nelson.

Police are confident a car pulled from Port Nelson belonged to Leo Lipp-Neighbours, who disappeared seven years ago.

Nelson Bays area commander Mat Arnold-Kelly said that "items of interest" had been found inside the car.

Arnold-Kelly said it was good to have progress in the case but police still had work to do on the investigation.

BRADEN FASTIER The car linked to missing student Leo Lipp-Neighbours is lifted on to a Port Nelson wharf on Tuesday night.

Police were keeping an open mind as to how the vehicle came to be in the water next to a wharf at Wakefield Quay on Nelson's waterfront.

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A Stuff reporter at the scene said the car looked to be a station wagon with mag wheels – Lipp-Neighbours was last seen driving his orange Toyota Corolla station wagon that had mag wheels.

BRADEN FASTIER Leo's parents Charlotte Lipp and Colin Neighbours inspect the car that could belong to their missing son.

When the car had been lifted on to the Wakefield Quay wharf, Leo's parents Colin Neighbours and Charlotte Lipp closely inspected the vehicle, which was covered in seaweed and grime. A friend of the missing Canterbury University student, who was 19 when he disappeared, could be seen wiping away tears.

The car's grimy covering prevented any identification of its colour.

A karakia could be heard as the car was lifted from a boat where it had been pulled from the water in darkness around 7pm. It was lifted by a crane onto the wharf upside down with its bonnet open and looked to be fairly intact.

BRADEN FASTIER/FAIRFAX NZ Leo's mother Charlotte Lipp, and friend Ben Clark, right, who was the last person to see Leo alive.

A crowd, including some of Leo's friends, had gathered to try to get a glimpse of the vehicle to put an end to the speculation and seven-year mystery.

There was no immediate statement from police about recovery.

Leo's parents had earlier been behind the cordon at the Wakefield Quay wharf watching the operation before they were taken to a fire command unit of the wharf.

BRADEN FASTIER/FAIRFAX NZ It was not known if the car had always been there, as tides may have taken it from somewhere else along the coast.

Lipp-Neighbours vanished in Nelson in the early hours of January 24, 2010, telling friends he wanted to be at one with nature.

Nelson Bays area commander Mat Arnold-Kelly said earlier it was a "distressing time" for Lipp-Neighbours' family as police worked to extract and identify the vehicle.

"They're on standby and they're obviously awaiting further information."

NELSON POLICE/SUPPLIED Leo Lipp-Neighbours' distinctive Toyota Corolla station wagon.

The family was getting all the support that would normally be provided, Arnold-Kelly said.

He said police were sorting through material removed from the submerged vehicle earlier on Tuesday at the Port Nelson wharf, searching for items of interest.