The father, identified as Christopher Maffei, 43, surrendered without incident in sailing waters off the Monterey Peninsula shortly before 8 p.m. tonight and the children were found safe on board the boat, Coast Guard spokesman Thomas McKenzie said.
He said the children would be checked out by medical personnel, but anticipated they would return home shortly.
South San Francisco police said the yacht was spotted this morning in the waters off of Pillar Point Harbor after local, state and national law enforcement was alerted to the kidnapping.
Maffei allegedly abducted his two children, Brooklynn, 3, and Devin, 2, at about 3 p.m. Tuesday in the 100 block of James Court in South San Francisco.
Police said Maffei then drove in a rental car to Ballena Isle Marina in Alameda, where he stole a yacht named "Unleashed" and sailed away with the children.
A commercial fishing vessel spotted the yacht around 4 a.m. today about 50 miles off the coast from Pillar Point Harbor in San Mateo County, South San Francisco police spokesman Sgt. Bruce McPhillips said.
The operator of the fishing vessel notified the U.S. Coast Guard, and after police were alerted of the sighting, photos were sent to the fishing vessel that helped its operator confirm that it was indeed the stolen yacht, McPhillips said.
Coast Guard duty officer Corinne Gaines said a C-130 aircraft from the agency located the vessel and monitored it from the air until crews could get to the scene by boat.
Kidnapping suspect's violent past surfaces
A woman living in Clearlake says back in 1989 she was assaulted by Christopher Maffei when she lived in the Bay Area. It was a personal injury case heard in San Mateo County Superior Court.
In 1989, Rhonda Straub was working as a park ranger aide at an event known as "Bicycle Sunday" in San Mateo County. Her duty was to keep cars out of the area. That's when Straub says she encountered Maffei, only twenty at the time, who was upset he couldn't get through.
"He jumps out, punches me out, tries to run me over with his truck," Straub said. "I fortunately rolled into my vehicle and he sped off. I got his license number and I struggled, I was pregnant at the time."
Straub says she miscarried the next day. Straub, who at the time used her married last name Schmidt, sued Maffei and the San Mateo County Parks and Recreation Department and received an undisclosed amount through workers' compensation.
Straub now lives in Clear Lake. Straub contacted ABC7 News after seeing him on the news.
The San Mateo County Superior Court also confirmed that in 2009, Maffei was charged with grand theft, but the case was dismissed.
ABC7 News also obtained a copy of the restraining order against Maffei. The court granted the order because there was reason to believe he might take the children outside of the U.S. after it was revealed Maffei had quit his job, closed his bank accounts, got rid of his assets, and sold his home. The order also points out that Maffei had lived in Thailand and had several bank accounts there.
According to the restraining order, there must be a court hearing on the matter. The judge has asked that Maffei appear in court two weeks, on September 21.
Bay City News contributed to this report.