The dinghy was spotted in an area of the central Pacific where a New Zealand military aircraft is searching for the MV Butiraoi.
According to New Zealand Rescue Coordination Centre officer John Ashby, the dinghy was believed to be one of two carried on the Butiraoi.
"The group seem very relieved to have been found when the NZ Air Force Orion dropped supplies, including water and a radio, to them," Ashby said in a statement.
The New Zealand Defence Force said today the fishing vessel was 92 kms northeast of the dinghy's location and expected to reach the survivors mid-afternoon.
The Butiraoi was last heard from on January 18 when it set out on an expected two-day voyage from the island of Nonouti to Betio Tarawa.
The 17.5-metre (57-foot) wooden catamaran had undergone repairs to its propeller shaft before departure and rescue officials believe this may have contributed to navigation problems.
New Zealand sent a military aircraft to conduct sweeps of the area after being called in to help late on Friday by Fiji authorities who are coordinating the search.
Kiribati, a nation of 33 atolls and reefs with a total population of about 110,000, lies some 3,460 kms northeast of Fiji.
It is listed as one of the nations most at risk from rising sea levels.
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