According to the Newport Beach Police Department, the minivan, rented by the Chang family, had been rear-ended by a Mercedes on the Balboa side of the ferry run at about 9 a.m.
A man, woman in their 20s and two children - a 6-year-old girl and a 4-year-old boy - were rescued before the minivan sank 15 feet to the bottom.
Divers helped a crew hoist the minivan out of Newport Bay three hours after it went in.
The black Mercedes had pulled onto the Balboa Island Ferry, and according to the female driver, the accelerator stuck. She hit the back of the van, sending it into Newport Bay, while the Mercedes teetered on the edge of the ferry.
"I saw the back of the van come up in the air, and then in the water bobbing was the next thing," said witness Glenn Salsbury.
A ferry worker jumped in the water to help, and a boater also came up alongside and helped pull the family out.
"They started getting them out through the window. (The van) probably floated for about five minutes," Salsbury said. "When he got them out, within 30 seconds, the van just let go and just sunk."
No one was injured in the incident.
It was unclear if the driver of the Mercedes, identified as 47-year-old Lisa Waite, would be cited. Posted signs warn drivers to "stop your engine" and "set your brake" on the ferry. Newport Beach police are investigating.
"Our investigators will follow up onto what exactly occurred," said Newport Beach Police Lt. Bill Hartford.