Locals say a small wooden boat filled with asylum seekers has made it to within 500 metres of the Cocos Islands.

On Tuesday afternoon the ABC's Hack program broke the news a small boat was intercepted close to the Australian territory in rough weather, carrying an estimated 12 asylum seekers who one local identified as being Sri Lankans.

The program said the boat approached the Indian Ocean archipelago, about halfway between Australia and Sri Lanka, on Monday morning.

Local man Awie Rasa said he saw the vessel approaching the main lagoon between Home Island and West Island about 10.45am, local time.