The crash occurred around noon near the highly trafficked Rialto bridge, one of the most picturesque and popular spots of the lagoon city, which is overwhelmed by tourists this time of year. Venice's mayor promptly convened a panel of experts to look into worsening congestion in the city's waterways.
Police spokeswoman Erika Veronica Di Francesco said the vaporetto, or the public "water bus" that plies Venice's canals, was docking and apparently didn't see the nearby gondola, which was carrying five members of a visiting German family.
She said the father of the family was believed to have been crushed to death in the crash. The family's 3-year-old girl was hospitalized in Padua with facial and head injuries. Contrary to earlier reports, none of the gondola's occupants fell into the water, she said.
Both the gondola and the vaporetto were sequestered by police, and prosecutors have opened an investigation, she said.
Police declined to identify the victim.
Venice Mayor Giorgio Orsoni sent his condolences to the family and said he was convening a panel of experts to resolve Venice's traffic woes.
"The problem of water traffic congestion, in high periods and in particular areas of the center, is real," he said in a statement.
In a sign of mourning, some of Venice's gondoliers were stopping service Saturday afternoon, the ANSA news agency said. It quoted the head of Venice's gondolier's association, Nicola Falconi, as saying the increased congestion is due to new vaporetto lines that have entered service and private boats, primarily from hotels, that are clogging the Grand Canal.