In Merriam-Webster's online dictionary, "Sublime" is defined (in the second definition) as "very beautiful or good : causing strong feelings of admiration or wonder."
In Coleridge's Rime of the Ancient Mariner the sublime event must refer to the moment when the mariner looks upon the water-snakes and finds them beautiful. This is a marked transition from his earlier impression of the sea creatures. "And a thousand thousand slimy things lived on and so did I" (234-236). The mariner says this in disparagement as he disdains the fact that he alone is alive among "The many men, so beautiful!" (232).
The sublime moment occurs when he realizes the beauty of the sea snakes and realizes they, too (like the men), are one of God's creations and worthy of admiration. "O happy living things! no tongue Their beauty might declare" (277-280). The mariner is so moved by his new insight that he states, "A spring of love gushed from my heart, And I blessed them unaware" (281-283).
This was the climaxing event that caused the Mariner's curse to be broken. "Sure my kind saint took pity on me, And I blessed them unaware . . . And from my neck so free The Albatross fell off, and sank Like lead into the sea" (284-287).