"The crew managed to get to the safety of an island, along with four Red Cross staff who were on the boat," Red Cross official Joe Lowry said. "But we've lost most of the cargo."
The double-decker relief boat was carrying about 100 bags of rice, 5,000 thousand liters of drinking water, 10,000 water purification tablets, 200 water storage containers, 10 stretchers, 30 boxes of clothing and household items like soap.
A submerged tree damaged the hull of the boat as it headed toward the delta town of Bogale, which was hit hard by the cyclone, Lowry said. The boat sank quickly, leaving its cargo at the bottom of a muddy river, he said.
The boat was traveling from Yangon to Mawlamyinegyun when it sank, according to the Red Cross.
"[It's] the first time we got a boat going with so much aid on it; the local Red Cross people are extremely saddened and distressed that they've lost this," Lowry said. "Thankfully no lives were lost."
A U.S. military transport aircraft with relief supplies is expected to land in Myanmar on Monday on a mission that officials hope will help forge a relationship to allow the United States to send in disaster experts.
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The United States said it received permission to land the Lockheed C-130 Hercules, and hopes to send in two more planes on Tuesday.
The C-130 will be carrying items such as wood, buckets, nails, blankets and plastic tarps to help with shelter needs. The supplies will be handed to the military junta that rules Myanmar.
The U.S. military also is trying to meet face-to-face with junta leaders to get permission to distribute U.S. aid to cyclone victims in remote regions by helicopters, according to two senior U.S. officials.
The United Nations estimates the death toll from last weekend's Cyclone Nargis ranges from 63,000 to 100,000, well above the Myanmar government's estimate of about 22,000. Tens of thousands of people are missing. 
Watch a behind-the-scenes look at the damage »
The Britain-based international aid agency Oxfam warns that without the proper relief -- particularly clean water -- nearly 1.5 million people could be affected by a wider humanitarian crisis.
Nearly a week after Cyclone Nargis hit the south Asian country, providing relief supplies has been a daunting task for international aid agencies.
The country's name was changed from Burma to Myanmar in 1989, but many who do not recognize the current government still use its former name. The military junta has said it will accept international aid but insisted it would distribute the supplies itself.
That has raised fears that the supplies will not get to the people who need it most, according to Debbie Stothard, head of the Southeast Asian human rights group ALTSEAN-Burma.
"We're getting, starting to get, reports of aid being distributed with the names of military leaders and VIPs plastered all over the aid packages," Stothard said. "There's people who are very concerned now, that the reason the aid workers are being blocked is so that the military can deliver aid selectively and so that they can appropriate the aid and pretend it was from them in the first place."
An American embassy official in Thailand said the USS Essex was also en route to Myanmar with supplies.
A French naval ship is also on its way toward Myanmar, transporting 1,500 tons of medical equipment, food and water.
Bernard Kouchner, foreign affairs minister, said the French aid will go directly to the victims.
"We won't give aid to Burma's junta, even if they would accept it. We will use our own channels in the country."
Also Sunday, Australia pledged $25 million in relief aid to Myanmar.
Half the money will go to international relief agencies and non-governmental organizations. The other half will go to the United Nations, a spokesman with the Department of Foreign Affairs and Trade said.
Three IRC planes carrying 14 tons of shelter materials landed at the Yangon International Airport on Saturday. Two more arrived from the U.N. World Food Program, which temporarily halted flights Friday after the government refused to let their workers pass out the supplies.
Additional flights by the WFP and other U.N. agencies in various countries were expected, said WFP's chief spokeswoman in North America, Bettina Luescher.
"The authorities at Yangon airport told us yesterday it can be collected and taken to distribution wherever we decide," Luescher said via e-mail Sunday. "We will be collecting them today and moving them directly for distribution."
As aid groups struggle to overcome obstacles slowing their distribution of supplies to cyclone victims, Myanmar TV was broadcasting messages urging citizens to vote "yes" in a referendum that critics say would strengthen the military rule. Watch how the vote is still on despite the devastation »
The marketing campaign showed pictures of people voting as a song played with the lyrics, "Let's go to cast vote with sincere thoughts for happy days." Similar notes were posted on ballot boxes.
"The state on the ground remains essentially the same and the so-called referendum, in which voting took place yesterday, on the reports we've had, effectively took place without incident," said Australian Foreign Minister Stephen Smith.
"But I again make the point as I've made consistently: Australia regards the referendum process as nothing more, nothing less than a sham. And our view would be the referendum process be deferred completely, rather than just being deferred until the 24th of May in the most adversely affected areas."
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