A burst water main has flooded several central Queenstown streets, sweeping away cars, inundating a luxury hotel and sending debris into Lake Wakatipu.
Fire crews were called mid-morning after the water main on Thompson St burst, sending water cascading down the street as well as Brunswick St and Lake Esplanade.
A reporter at the scene said a 300-metre stretch of Thompson St has been cordoned off by police.
A Queenstown Lakes District Council spokesperson said the flooding happened after a contractor hit a 300-400mm water main pipe on Thompson St.
"This has caused a large volume of water to flow down a bank onto Brunswick Street, causing damage to four cars and potential flooding to some private properties.
"Unfortunately some debris [have] entered the lake – this has been contained and a clean-up underway.
"The water was shut off in time to reduce the effect on the reservoir, meaning residents in the immediate area and town centre will still have access to water.
"Council contractors are urgently working to repair the main and working with any residents or businesses affected," the spokesperson said.
Thompson St and Brunswick St had been closed while repairs to a damaged water main were carried out.
Photos shared by police show the floodwaters had swept away parked cars.
A Fire and Emergency NZ spokeswoman said water was flooding the St Moritz Hotel.
Council staff have asked people to avoid the area.