St Mary's School in Milton is in lockdown following a chemical spill that has sparked a major emergency service response this morning.
Milton resident Bruce Good said St Mary's School had been put in lockdown following reports of two barrels leaking a substance.
His house is directly opposite the school.
"All of the teachers' cars are there so they have not been evacuated."
Residents in parts of Milton have also been told to stay inside.
However, Good said he had not been instructed by anyone to stay inside his property.
A police spokeswoman said emergency services were called to Chaucer St, between the intersections with Abercrombie and Shakespeare Sts, just after 9.30am after reports from Clutha District Council a 25-litre drum containing chemicals was leaking.
A Fire and Emergency New Zealand (Fenz) spokesman said the drum contained the chemical chloropicrin.
The spokesman was not sure what risk the chemical posed, but residents in the immediate vicinity were being told by police to stay inside.
Three fire appliances from Balclutha and Milton were on the scene and two appliances, a command unit and a hazmat unit were on the way from Dunedin.
According to the United States' Centre for Disease Control chloropicrin, which is used as a broad-spectrum antimicrobial, fungicide, herbicide and insecticide, could be severely irritating to the lungs, eyes, and skin in high concentrations.
A reporter at the scene said police, fire and ambulance staff were at the scene and a cordon was in place at the northern end of Chaucer St.
People were watching events unfolding from their properties, but winds in the area were light, he said.