The 17 had donned life jackets and survival suits and abandoned the HMS Bounty after sending out a distress signal.
The ship's Facebook page said 14 of the 17 had been rescued by 8 a.m. ET.
The Coast Guard sent a C-130 and two rescue helicopters, HH60s, to rescue the crew, WITN-TV reported. The Washington , N.C., TV station said one helicopter began bringing back the first batch of survivors around 7 a.m. ET
The 180-foot ship was without propulsion and had taken on water, the Coast Guard said, according to the Associated Press.
The ship was trapped in 40 mph winds and 18-foot seas about 90 miles
southeast of Hatteras, N.C., and 160 miles west of the eye of the
hurricane, according to a Coast Guard statement
The CBC reported that the ship, which is used as a sea school, has sunk.
The Coast Guard first received a call Sunday evening from the ship's owner who said she had lost communication with the crew.
Coast Guard's 5th District command center in Portsmouth, Va., later
picked up a signal from the ship's emergency radio beacon that confirmed
it was in distress and gave its position.
The CBC quoted Claudia
McCann, wife of the ship's captain, Robin Walbridge, as saying he was
trying to get around Hurricane Sandy en route to Florida.
"He was just trying to avoid it, skirt it. Skirt through it, skirt around it," McCann told the CBC. "I'm sure he's devastated. Absolutely devastated. But the crew comes first and you have to save the crew."
The ship is a replica of one made famous in the film Mutiny on the Bounty and was featured in one of the Pirates of the Caribbean movies, WITN-TV reported.