The Manx government says it is in talks with the Steam Packet over contingency arrangements with the Manxman out of action until late September.
And it is looking at what plans are in place for maintaining services during the Manx Grand Prix.
Issues with the worn prop shaft bearing and shaft liners were identified during scheduled maintenance.
The Steam Packet says the complexity of the repairs, together with the availability of dry dock facilities and the need to source specialist parts and engineering support from suppliers in the UK and Europe, means the vessel is not expected to return to service until late September.
Managing director Brian Thomson has said the cause has yet to be established.
He has not discounted the possibility that the problems could be linked to the build-up of silt in Douglas harbour.
This week, plough dredging was being carried out by the harbours workboat Tarroo Ushtey. The Department of Infrastructure insists the work is routine.
Meanwhile, the department says it is assessing the impact of the Manxman’s enforced absence on passengers and freight services.
A spokesperson for the DoI said: ‘The department is working closely with the Isle of Man Steam Packet Company to understand the situation following the withdrawal of the Manxman from service and to assess the impact on passengers and freight services.
‘We are in ongoing discussions with the company regarding the contingency arrangements it has in place and its plans for maintaining services in the coming weeks, including during the forthcoming Manx Grand Prix period.
‘We recognise the importance of reliable sea links for residents, visitors and businesses, and will continue to engage with the Steam Packet as the situation develops.’
The Isle of Man Chamber of Commerce described the news about Manxman as a ‘significant blow’, not only for the Steam Packet Company but for the Isle of Man.
In a statement, it said: ‘Members in the visitor economy are telling us that the timing of this disruption, at the height of the summer season, could have a significant impact on the industry.
‘With the Ben-my-Chree offering less passenger capacity than Manxman while also operating the Larne service, there are concerns that fewer visitors will be able to travel to the island during what is traditionally the busiest period of the year.
‘Some businesses are already seeing customers' travel plans disrupted and are worried that reduced ferry availability and fully booked sailings will deter last-minute bookings, affecting visitor numbers across the sector.
‘Against that backdrop, the loss of Manxman for an extended period, particularly during one of the busiest times of the year for the visitor economy, is both disappointing and concerning.’
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