No-one was injured but it caused a small oil spill in the west dock.
The well known landmark, which weighs several hundred tonnes, is a leftover legacy of BiFab which ceased operations at the town’s dock yard in 2020.
The steel fabrication company, which has yards in Methil and one on the Isle of Lewis, went into administration after Scottish Government ministers ruled out nationalising the company.
A spokesman for Forth Ports said: “Importantly, we can now confirm that no-one was injured in the incident at the Port of Burntisland which occurred at 9.30am on the site which was under the control of the specialist demolition contractor.
“A small amount of gearbox oil has spilled into the water.
"However, because the West Dock at Burntisland is an enclosed dock, there is no risk of any of it entering the Forth Estuary.
"Our specialist oil recovery contractor is on site and will contain and recover the oil.”
Forth Ports confirmed the topside element of a redundant crane, that was in the process of being demolished when it fell into the West Dock.
The spokesman added: “This was clearly a concerning incident.
“A team from Forth Ports and the demolition contractor is on site assessing the best way to recover the structure from the dock.
“The specialist demolition contractor was in full control of the site and the operation at the time of the incident.
“The West Dock of the port remains closed at this time.”
Councillor Kathleen Leslie, for Burntisland, Kinghorn and Western Kirkcaldy, said: “Forth Ports have informed me that a specialist team from Grangemouth has been sent to Burntisland to ensure the site is made safe.
"I will be getting back in touch with them to check that all health and safety procedures are being followed and that their practices are up to scratch.
"Thankfully there are no injuries but any safety issues need to be addressed at the site.
"I will be following this up to ensure the local community is made aware of any further developments and to address any concerns they may have.”