The Eastern Star overturned late on Monday after being caught in a storm.
Just 14 of the 456 passengers and crew are known to have survived what looks set to be China's worst shipping disaster in more than 60 years of Communist rule.
Authorities say the chances of finding anyone still alive were "slim".
"In a situation in which the overall judgment is that there is no chance of people being alive, we could start the work of righting the boat," Transport Ministry Spokesperson Xu Chengguang had told reporters at a news conference on Thursday.
Rescue workers on the upturned hull, which was just barely visible over the brown waters of the Yangtze, were towered over by two cranes.
Hooks were welded onto the ship and a net stretched around the entire structure in preparation for lifting it.
By first light on Friday, the ship could be seen lying on its side with its name visible just above the water. Xinhua state news agency later tweeted a picture of the righted vessel, its roof apparently crushed.
As the ship is righted, the focus of emergency workers at the site in Jianli, Hubei province will switch from attempting to find survivors to searching the ship's 150 cabins for bodies.
Mr Xu said on Friday that the next step was to raise the ship entirely above the water to conduct the search.
So far 97 bodies have been recovered, some after three holes were cut into the vessel's upturned hull. The holes were later welded closed in order to preserve the ship's buoyancy.
Most of the 14 people known to have survived jumped from the ship as it began to sink. Three were rescued by divers from air pockets in the upturned hull.
The cause of the sinking is not yet known, but survivors have spoken of an intense storm which flipped the boat over in minutes.
The captain and chief engineer, who were among those who escaped, have since been detained.
Maritime agency records showed the ship was investigated for safety violations two years ago. It was held alongside five other vessels in 2013 over safety concerns.
China's deadliest maritime disaster in recent decades was in November 1999, when the Dashun ferry caught fire and capsized in the sea off Shandong province, killing about 280.
The Eastern Star could become China's deadliest boat accident since the SS Kiangya sank off Shanghai in 1948, killing somewhere between 2,750 and 4,000 people.
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