Fire department rescue crews headed to the area accompanied by a sniffer dog, while the coast guard evacuated the beach and banned boats from approaching until further notice.
Greek rescuers have been searching the beach, which was packed at the time, for possible victims after the landslide left at least one woman injured.
The video included below shows the moment the rock broke away from the cliff face, with what was described as some as being an "almighty cracking sound".
One of the Ionian island's main attractions, Navagio has a shipwreck on the shore and is surrounded by steep cliffs.
Video footage shows beach-goers running in panic as part of a cliff peels off the rock wall at the end of Navagio beach, tumbling to the sand.
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Also known as "shipwreck beach", the cove is only accessible by sea, and is famous for the wreckage of a small cargo ship that has been washed up on the beach since the '80s.
A government statement said a 34-year-old Czech woman had been hospitalised with a fractured vertebra, while her husband and two children sustained light injuries.
The coastguard later called off their search, saying everyone who had travelled to the beach on the tourist boats had been accounted for.
"There was a noise and a small piece of rock fell, then a second bigger and finally a third big piece of rock that during the fall created a sea whirlpool that overturned the boats", one eyewitness said.
While now, no one is missing, the coastguard called in helicopters and boats to search the area, in case anyone was trapped under the rocks.