The type of coral reef that forms a ring around a central lagoon is an atoll. An atoll typically consists of a roughly circular reef rim, often topped by small coral islands or sand cays, enclosing a lagoon.
The classic explanation for atoll formation comes from Charles Darwin’s subsidence model. A fringing reef first grows around a volcanic island. As the island slowly sinks or the relative sea level rises, the reef grows upward and becomes separated from the island as a barrier reef. If the island eventually disappears beneath the sea, the surviving reef forms a ring around the lagoon.
The lagoon is not simply the crater of an underwater volcano. Its shape reflects the relationship between reef growth, erosion, sea-level change and the sinking or geological alteration of the original island. Modern scientists also recognize alternative formation models, including antecedent karst processes.
A barrier reef may also enclose a lagoon, but it usually runs parallel to a substantial coastline or island. A fringing reef hugs the shore, while a patch reef is an isolated reef area rather than a continuous ring.