Just before 1 p.m., officials say about 150 feet of the wharf which included a construction site and some restrooms fell into the ocean.
Santa Cruz Police Chief Bernie Escalante said in a news conference that two people had to be rescued by a lifeguard unit on jet skis, while the third person was able to swim to safety.
The mayor said the section of the wharf that collapsed had been damaged over time. The structure was in the middle of a $4 million renovation following destructive storms last winter.
Some of the wharf's pilings are still in the ocean and remain "serious, serious hazards" to boats, the mayor said. Each piling weighs hundreds of pounds and is being pushed by powerful waves.
Governor Gavin Newsom's office says he has been briefed on the collapse and that Cal OES is working with local officials to provide support.
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The end of the pier that broke off had been shut down during renovations. The portion, which included public restrooms and the closed Dolphin restaurant, floated about half a mile down the coast and wedged itself at the bottom of the San Lorenzo River.
Those who fell into the water were two engineers and a project manager who were inspecting the end of the wharf, officials said. No members of the public were in the area.
Building inspectors were now looking at the rest of the Santa Cruz Wharf's structural integrity and will remain closed indefinitely.
Monday's collapse came about a year after the Seacliff State Beach pier just down the coast was battered beyond repair by a heavy winter storm.
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ABC7 Meteorologist Drew Tuma says there is a High Surf Warning in effect along the coast for life-threatening waves. Heights could exceed 30 feet.
The National Weather Service is warning everyone to stay out of the water and off of jetties, piers and other waterside structures. Beachgoers are warned never to turn their backs on the ocean.
The Santa Cruz Beach Boardwalk posted to X that due to current conditions the Boardwalk, Casino Arcade, and Neptune's Kingdom will be closed for the remainder of the day.
Main Beach and Cowell's Beach are also closed due to high surf and the large amounts of debris, including hazardous materials.
The large waves that caused the collapse of the Santa Cruz Wharf have also forced the closure of Capitola Village.
Police say high and powerful waves have pushed seawater into the Village.
People who live in the Venetian Court apartments are advised to evacuate any water-facing units.
Village residents in the 100 blocks of Esplanade and Monterey Avenue should shelter in place or voluntarily leave the Village area, police said.
The closures are in effect until further notice.
The Associated Press and Bay City News Service contributed to this article.
Stay with ABC7 News for the latest details on this developing story.