Two male suspects in their early thirties were detained and the engines, worth RM20,000, were recovered, said Penampang police chief Deputy Superintendent Ratan Kumar Singh.
Also seized was a boat believed to have been used in the incident.
A police report was made at 4.30am on Saturday in Kg Sipanggil, Putatan.
"Based on a tip-off, the Kota Kinabalu marine police team, led by Inspector Abd Aziz Abu Hashim, caught the first suspect in Kampung Dumpil at 5pm on the same day.
"This led to the capture of the second suspect, who did not have identity documents at the night market in the city centre.
"After admitting to the crime, the suspects brought the marine police to some bushes alongside Jalan Kampung Dumpil where the first engine was found at 7.30pm," said Ratan.
The search was discontinued after nightfall. Villagers found the remaining two engines around the same area at 10am the next day.