Those on board the yacht issued a mayday call and activated its distress beacon about 3am (AEDT).
AMSA Search and Rescue officers issued a broadcast to shipping and tasked a rescue helicopter from Lismore to assist.
Two merchant ships, Silver Pegasus and British Loyalty responded to the broadcast.
The crew of British Loyalty rescued the four people on board the yacht about 5.30am.
The yacht activated its distress beacon after hitting a submerged object and taking on water.
Weather conditions in the area were rough, with 30 knot winds and two to three metre seas.
Those on board the yacht were well prepared, with a GPS encoded beacon, which was properly registered with AMSA.
AMSA would like to thank the merchant ships and helicopter crew involved in the rescue.