The YM Eternity was freed on Monday night after Yang Ming's insurers provided sufficient security ahead of a now looming court battle with the Australian Maritime Safety Authority.

The ship had been arrested by the Federal Court Admiralty Marshall due to an outstanding debt AMSA was attempting to recover from the ship's insurance company.

The debt was a $3 million bill for the clean-up of containers lost from Yang Ming's YM Efficiency off the coast of Newcastle in 2018 that its insurers had failed to pay by the January 18 due date.

"After reaching an agreement with the insurers of the YM Eternity on the security to be provided, the ship was released from arrest last night," an AMSA spokesperson said on Tuesday.

"AMSA has never taken action to recover debts through the Marshal before and it is not something that we have done lightly.

"The continued refusal of Yang Ming and its insurers to discuss payment for the pollution clean-up has left us with no other option but to seek to recover our costs through the Federal Court.

"As the matter is now before the courts AMSA is unable to comment further but looks forward to finalising this matter."

The YM Eternity remained docked in Port Botany on Tuesday afternoon.

It is scheduled to leave the port bound for Melbourne on Wednesday night.

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