The boat was on route to Chania, off the island of Hydra, the Greek coast guard said on Wednesday.
There were no immediate reports of injuries and the situation is not worrying, a coast guard official told Reuters.
A car parking compartment had caught fire around midnight as the Eleftherios Venizelos passenger ferry was sailing off Hydra with 875 passengers and 141 crew onboard.
The ferry is expected to dock at Piraeus in about 10 minutes, the official added.
Pictures have emerged of the ferry – owned by the ANEK line – being doused by water jets in a bid to calm the blaze ahead of its arrival at the port.
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Theo Gkousarov wrote about the fire on Twitter, saying: “A friend of mine travelling from Athens Pireaus to Chania Crete with ANEK lines sent me this photo.
“The Ship is on fire and it is being evacuated.
“They are now returning back to port with several ships heading for emergency.”
He shared an image of people in orange life jackets as they were evacuated from the boat.
More to follow…