A boatload of asylum seekers at the centre of a standoff between Australia and Indonesia will be taken to Christmas Island.

While Indonesian authorities "review" Australia's request that the passengers – believed to total more than 50 – be taken to Indonesia, immigration minister Scott Morrison ended the stalemate on Saturday.

"In the best interests of the safety of the passengers and crew... earlier this morning I requested transfer [of] the persons rescued to Christmas Island for rapid onward transfer to Manus Island or Nauru," Morrison said in a statement.

Australian authorities responded to a distress call from the wooden boat on Thursday, finding it about 43 nautical miles south of Java. But requests to take the passengers to Indonesia were refused by local authorities, sparking a standoff that lasted more than 24 hours.

"On two recent occasions, Indonesia has agreed to these requests and facilitated an on-water transfer," Morrison said. "The Indonesian government has advised Australian officials overnight that they are reviewing the request put forward by Australia."

A spokesman for Djoko Suyanto, the Indonesian co-ordinating minister for legal, political and security Affairs, said Jakarta was reluctant to accept them because the boat had been in working order when first approached by the Australian navy vessel HMAS Ballarat.

"From what I've been told, the boat was fine and they were not in danger. If that's the case, then we reject it," Agus Barnas told AAP on Friday.

"We don't want Indonesia to be a dumping ground, but we don't want Australia to accuse us of not doing anything. We want to respect Australia. At least for the time being we will not accept them."

Morrison said Australia would continue to liaise with Indonesia on a case-by-case basis and that the request was made on this occasion because the boat was so close to the Indonesian coast.

The immigration minister was quick to confirm that the suspected asylum seekers would not be resettled in Australia.