A commercial dive vessel off the coast of Western Australia has sparked an emergency response after being mistaken for an asylum seeker boat.

The boat was seen about 400 metres off Separation Point, near Geraldton's Tarcoola Beach, this morning.

Witnesses described it as an Indonesian-style fishing boat, and police, port staff and local shire authorities rushed to the area.

Last year, a fishing boat carrying 60 Sri Lankan asylum seekers arrived at Geraldton harbour undetected, in one of Australia's highest-profile breaches of Australian border security.

However, this morning's boat turned out to be the diving vessel Abrolhos Enterprise, which is owned by commercial diving company Ledge's Diving Services.

Owner Buck Baker said he had been undertaking scheduled maintenance on an underwater pipe at the Batavia Coast Maritime Institute when he received a call from Customs.

"They were just checking to see that we were not posing any threat," he said.

"I thought it was quite humorous."

He said the boat had been in the waters off Geraldton for 30 years "and there's never been a problem".

Dozens of people gathered on Tarcoola Beach this morning, many with binoculars, after reports of an asylum seeker boat near the shore.

School principal Rob Crothers was fishing in a boat off the beach when he spotted the Abrolhos Enterprise.

He said it resembled an Indonesian fishing boat.

"It was Indonesian-style so it looked different to the rest of the boats that are up around Geraldton," he said.

"It didn't look like there were many people on board.

"It was a little unusual to see a boat of that size in close at that particular location."