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The fast ferry Fairweather needs engine work and will be out of service until mid-April, according to the Alaska Marine Highway System.
Cracks developed in the metal sleeves around the four diesel engines, officials said.
The state has the option this year to buy two more high-speed ships, but this malfunction could influence that decision.
"I can pretty much guarantee you it's a factor," said John Manly, Alaska Department of Transportation and Public Facilities.
State officials worry about how well the engines hold up, he added.
Several communities in Southeast Alaska will have diminished service while repairs are made and the department decides how to redeploy other ships to serve the Fairweather's routes.
The vessel was serving Lynn Canal and, three days a week, a new route shuttling passengers between Juneau and Petersburg. Its sister ship, the Chenega, was sailing in Southeast Alaska for the first time this winter as a shuttle between Ketchikan and Petersburg while the state explored ridership potential and the boats' ability to navigate channels.
"In my opinion, the test was successful," said Bruce Jones, Petersburg city manager. Even though the boats were not full, Juneau travelers stopped by for shopping excursions and for other reasons while Petersburg residents went to other communities, he said.
State officials disagree. The Chenega, undergoing maintenance in Ketchikan, will not return to the Petersburg-Ketchikan route because the ridership is not supporting it, Manly said.
Blaine Ashcraft, Ketchikan football coach and commissioner of the city's youth football league, said the new route held promise for sports teams.
"I saw the opportunity for regional travel and lower expenses," he said. The alternative to taking fast ferries is flying.
Manly said the department is undecided on where the Chenega will be deployed next. In the meantime, Lynn Canal will be served four times a week by the mainliner ferries Columbia, Matanuska and LeConte, on the regular schedule, Manly said.
The Lynn Canal route between Juneau, Haines and Skagway serves as a gateway to Canada and the state's Interior. The Fairweather sees heavy traffic from tourists in the summer, but Chilkat Eagle Bed and Breakfast owner Dave Nanney said locals shape their lifestyles around the ferries' schedule in the winter.
Businesses and organizers in Haines were banking on the Fairweather's schedule to make cultural events in the off-season successful, Nanney said.
Maintenance workers discovered the problem when the Fairweather and the Chenega went into the Ketchikan Shipyard late last month for regularly scheduled work.
The cylinder sleeves on the engines developed hairline cracks, which allowed coolant to enter the cylinders, according to Captain John Falvey, AMHS general manager.
"We have been in contact with the manufacturer and are proceeding with a plan to replace all the sleeves on the engines, which we estimate will take nine to 10 weeks," Falvey said.
The Fairweather had one of its engines replaced under warranty last year when it developed a coolant leak due to a manufacturer's defect.
Falvey said it is unclear how much of the current breakdown will be covered by warranty. Manly said labor costs could be about $550,000.