The fire brigade was able to get the blaze on the Ems River canal under control, in addition to preventing it from spreading to other nearby ships, police said.
Super-grade fuel leaked out of the burning ship and also caught fire, which was also put out with a special foam. But the dangerous fuel-water combination created in the accident could still cause further fires or explosions, police said.
The ship's five crew members also managed to escape, though one suffered minor injuries.
But the ship still sank in the 3.5-metre deep harbour, with end still protruding from the water.
On Tuesday morning fire fighters were still cooling the tanker with water, and the Dortmund-Ems canal was closed to shipping traffic.
Residents in the area were advised to keep windows shut due to soot, though no other dangerous chemicals were found in the area, police said.
The cause of the explosions remains under investigation.