Italy's Costa Concordia cruise liner has begun its last voyage, as tug boats towed it from its wreck site off the Italian island of Giglio where it capsized two years ago, killing 32 people.

The rusting liner, which has been floated in the biggest-ever salvage operation of a passenger ship, was being towed on Wednesday to the port of Genoa in northwest Italy, where it will be dismantled and scrapped.

Hundreds of onlookers, including survivors, watched as the final cable attaching ship to shore was cut.

"We've done it! She's off!" shouted salvage specialists who popped champagne bottles and sprayed the crowd, while onlookers cheered as the ship pulled away.

"When we are in sight of the port of Genoa, we can declare victory," said Franco Gabrielli, the head of Italy's civil protection service, according to Reuters news agency.

The 114,500-tonne wreck is due to arrive at a port near Genoa on Sunday, before it is broken up for scrap. It is being accompanied by 14 vessels.

'Biggest challenge'

Precision sensors attached to the sides of the ship are monitoring for possible cracks in the hull, while underwater cameras are watching for debris washing out of the vessel amid fears toxic waste could spill into the sea.

Objects floating free such as suitcases, clothes and furniture are being caught in a huge net and infrared sensors will be used to detect possible oil leaks at night.

On the evening of January 13, 2012, the 4,229 passengers from 70 countries were settling into the first night of their cruise when their luxury liner struck a rocky outcrop off Giglio. 

Concordia is the biggest Italian passenger ship ever built, boasting four swimming pools, tennis courts, 13 bars, a cinema and a casino.

The crash tore a massive gash in its hull and it veered sharply as the water poured in, eventually keeling over.

Source: Agencies