The traffic lights at the intersection of Te Ngae Rd and Sala St are down.
Police are at the scene directing traffic.
Rotorua Lakes Council Transport Operations Manager, Peter Dine, said council contractors were currently working to isolate the problem however it may take some time.
"Motorists are asked to exercise extra care near the intersection, reduce speeds and be courteous to other travellers - especially during the peak afternoon traffic period," Mr Dine said.
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