The Clarence River has burst its banks, with residents being told to move to high ground immediately, as aftershocks continue to rock the country.
The river had been dammed by a rock slide after a 7.5-magnitude earthquake struck near Hanmer Springs at 12:02am.
Emergency workers began evacuating nearby residents around 3.30pm as a precautionary measure before the slip breached.
By 2.10pm, 382 aftershocks had struck the region. Of those, 216 were more than magnitude 4.
Rumblings continue by the minute.
The 15-metre deep quake, which stuck 20km southeast of Hanmer Springs, was more powerful than two shakes which devastated Canterbury in 2010 and 2011.
The 2010 quake which hit Christchurch was 7.1 on the Richter scale while the 2011 quake was 6.3 on the Richter scale.
Two people have died as a result of today's quake.
One man died in Kaikoura when the historic Elms Homestead collapsed. And a Mt Lyford woman reportedly died from a medical event while she was evacuating her home.
The bodies of both people have been recovered and police are working to inform next of kin.
A local state of emergency has been declared in Kaikoura and Hurunui. However, the tsunami warning that was in place for Wellington to Banks Peninsula has been cancelled by Civil Defence.
"Based on all available data, the tsunami threat has now passed."
But Civil Defence warns that coasts may experience unusual, strong currents and sea level fluctuations for several more hours. "Please stay aware in and around coastal waters."
Power is gradually being restored in Kaikoura, but sewerage systems and water supplies are still down.
Residents are still experiencing significant mobile, landline and broadband connectivity issues due to damage to physical infrastructure and power outages.
Large slips are blocking the only access roads to the town on the South Island's East Coast.
There are an estimated 1000 tourists in Kaikoura and more than 3500 people usually live in the district.
The Defence Force has been tasked with delivering essential items, with NH90 helicopters already making runs, and HMNZS Canterbury heading to the area.
The Air Force could also use its smaller planes, King Airs, which are parked in Blenheim at present to ferry tourists out.
The Fire Service Urban Search and Rescue (USAR) team with two dogs from deployed Christchurch this morning has arrived in Kaikoura.
The self-sufficient team is carrying out building assessments in support of local authorities.
Another USAR team of 20 is on standby in Christchurch.
Between 12.03am and 5am, the fire service was called out 245 times.
Prime Minister John Key has described scenes of "utter devastation" as he flies over the Kaikoura region.
Key and Civil Defence Minister Gerry Brownlee estimate the clean-up will run into the hundreds of millions and clearing the debris and blocked roads could take months.
Since the earthquake hit, police received 19 reports of burglaries at Canterbury properties.
"This sort of offending really scrapes the bottom of the barrel," Canterbury district commander, superintendent John Price said.
Ten extra officers have been sent to Kaikoura to provide support to the emergency response, and to assist in general policing and community patrols.
In the hours between midnight and midday today, St John emergency 111 call volumes in the Canterbury and Tasman regions were almost double the levels the ambulance service normally experiences.
St John national controller Murray Holt said that after an initial surge between 1am and 2am, numbers decreased, but spiked again after 10am.
"Call volumes have now returned to normal levels and our Clinical Control Centres are operating business as usual."
After the quake, KiwiRail train services were suspended and inter island ferries cancelled.
Significant damage to the train line between Picton and Christchurch, particularly around Kaikoura, is likely to see closures in the area last several days.
Passengers stranded on the Kaiarahi ferry overnight due to earthquake damage at ports in Picton and Wellington were able to disembark by midday.
Wellington train passenger services are expected to resume tomorrow.
Earlier:
The first, and most powerful quake hit at 12.02am and North Canterbury's Tess Prentice was tossed out of bed thinking it was the end of the world.
With her parents, Anthea and Snip Prentice, she sought shelter, sobbing as the violence of the quake rolled on and on.
"It was like someone picked up the house and started shaking us," said Prentice.
The three escaped the house for the lawn and as they fled, the cliff top home succumbed to the constant shaking to become a ruin. The signs are familiar in New Zealand now, a collapsed chimney, a roof pulled apart to expose the inside to the elements.
The force of the quake was such that it was felt across the country. Even Auckland, usually immune to the fault lines which have plagued the south, felt the ground move.
In Kaiapoi in northern Christchurch, Kineta Booker talked of how this morning's quake "just kept going".
"And then when it shifted into second gear ... [I] can't believe we've got to get used to these all again."
Nick Sorensen was in Wellington's Amora Hotel with his family. "We grabbed our girls and ran for the stairs, walls cracking and plaster falling around us.
"We ended up trapped behind a 2.5m barbed wire-topped fence outside the kitchen and those around us were screaming for someone to open it. We ended up throwing jerseys and cardboard over the gate and climbing it. A couple of those with us helped lift our daughters over."
Nearby, Lizzie Phillips told how she saw cracks appearing in the stairwell walls as she fled the building.
"I just didn't realise that the building would sway so much being on the fifth floor. I don't really like the idea of going back up there."
"I thought I was going to die," said TsunJeck Lim, 26. He was shaken awake on the 10th floor of a central Wellington apartment building. Water poured from the roof as pipes burst. His furniture and possessions were strewn across the apartment.
"Things started shaking and then things started falling one by one. I thought the building was going to collapse, but it stopped and I just ran down the stairs."
Kaikoura remains cut off from the rest of the country. Throughout the early hours, the coastal town continued to shake as aftershocks rolled through.
Kaikoura caught the immediate brunt, and civil defence staff walked uncertain and shaky streets with megaphones, urging people to get to higher ground as fears grew concerning a possible tsunami.
To the south of the town is a peninsula which offers a clear lookout along the coastline. It also offered refuge to those wanting to escape the coast.
Before dawn, it was crowded with people, many whom had abandoned cars and walked to safety.
Worry about the aftermath was focused on the sea as tsunami warnings blared along the east coast. In Timaru, ships berthed at the town's port were put to sea as a precaution against unpredictable seas.
Christchurch, well versed in earthquake response, evacuated from the coast inwards to the city centre. At New Brighton, tsunami sirens sounded through the night. Kineta Booker spent much of the night in her car with her husband and toddler after leaving their home near the coast.
Booker said out of nowhere supermarket staff started checking on people in the car park, handing out fruit to those who were forced to leave their homes. "Everyone was queued up and these angels came out of nowhere and they were making sure everyone was doing okay, even while they're probably freaking out themselves."
After the quake the couple headed north towards Oxford but stopped at Cust, about 35 minutes from Christchurch. "Hundreds upon hundreds of people are parked up, sleeping on the side of the road. It's surreal."
One family later returned to find thieves had ransacked the property. "Our house has been broken into and the work truck been stolen, TV, house is a mess," the homeowner said.
Tsunami sirens also sounded around the capital. While most people sought higher ground, some headed for the coast to watch water surging in and out. That potentially deadly curiousity drew others. Police on roads to the beach waved down and turned joyriders away.
There was keen concern at Lyall Bay in Wellington with reports water had withdrawn about 200m, the chilling precursor to a tidal wave.
Eventually, the city streets became filled with cars as those close to the sea sought higher ground.
Czech Filip Sebek, in New Zealand for five weeks, spent some of the night in his car in the hills around Lyall Bay after seeing a tsunami warning on the Internet. "At first I didn't know what was happening and after that, it was an earthquake so ... run away."
Truck driver Mark Fletcher went to Wellington port at 2am and watched a tidal surge.
"We noticed the water got really high and the lines on the [Bluebridge] ferry snapped. You could see all the water rushing out of the harbour will all the debris and stuff.
"The water would have come up about a metre and a half. It had a really eerie feeling about it all."
All sailings of the Interislander ferry were cancelled until damage could be assessed, leaving passengers stranded aboard until the all clear is given. The Tory Channel, leading into Queen Charlotte Sound, was closed for fear of tidal surges.
Shipping workers at Kings Wharf freight shipping terminal in Wellington, fled when water began spurting from beneath them.
"It was just panic stations," said one man. "Water was coming up from the wharf, we had about five seconds to evacuate. The freight office started shaking and we thought the wharf was going to sink so we ran up the terminal and water was coming up from the ground.
"We were waiting for it to stop, but once we realised it was just powering up we just ran."
The extent of the quake's damage is yet to be understood. Military helicopters were heading for parts of the country isolated by damage.
Daylight gave us a flavour of what is to come.
The road which runs closest to the centre is State Highway 70, running through North Canterbury from Culverden to Kaikoura.
This morning, it was closed with reports of damage to bridges, buildings and roads.
It passes through Waiau, a settlement of about 500 people just kilometres from the epicentre of the quake. The town is badly damaged, with collapsed bridges and power and phone lines down.
Rubble covers the roads leading to the town, with the highway itself fractured and split in parts. One of the quake's victims came from Waiau, a woman who suffered medical problems after leaving her home.
Reporter Chelsea Daniels walked into the town, making her way carefully across the Waiau River bridge. She said the school swimming pool was ruined, homes visibly damaged including dozens with broken chimneys. Roads were cracked, and the town's war memorial was in pieces.
The Waiau Lodge Hotel was "pretty well buggered", said local Brent Proffitt. "The chimneys have exploded inside, there are cracks in the foundation and plaster has fallen off. It's taken an absolute hiding.
Food from the freezer from the badly damaged hotel was being used to feed the community.
"Everyone is banding together and we're getting into the community spirit."
Proffitt called the quake "a doozy ... It was just into it. There was no warning, just into it and it was long."
SH7 from Waipara to Springs Junction is also closed today. Again, damage to bridges and roads made progress dangerous. In Culverden, which suffered sporadic damage, farmers were dealing with cracked milking pads.
Local Sam Smith said friends had spoken of huge damage to dairy sheds. "They're absolutely totalled. There's liquefaction everywhere as well which is kind of crazy."
Across the top of the south, power was cut. The prospect of a tsunami saw evacuation centres open and people moving away from the coast.
Concern over damage to bridges, particularly on the road south from Blenheim, saw more roads closed. Buildings in the town's centre were damaged and shop front windows broken - firefighters with cordons marked hazards in the town.
The force of the quake struck businesses and homes in Kaikoura. Water and sewerage services were lost, power and phone lines were cut.
The coastal routes which hug the rugged coastline north and south of the town were closed, clay and rubble covered the roads. Tunnels along the route, a delight for travellers, were turned hazards.
Elaine Powell was at her daughter's home in Glencree Rd, Oaro, south of Kaikoura. "No one is hurt thank goodness," she said.
The floor of the home had been torn apart from the force of the earthquake and a fireplace thrown about exposing a giant hole in the wall where it used to stand. Drawers were yanked from cabinets and the contents of cupboards and the fridge smashed on the floor.
Powell, her daughter and two young grandchildren were unharmed, in shock and trapped on their property. The only bridge out had lost road on either side, leaving it about half-a-metre clear.
"Even if they could get over that, the roads to Kaikoura and to Christchurch are down," she said.
In Wellington, where Prime Minister John Key was being briefed at the Beehive's emergency bunker, daylight revealed the TSB Arena and BNZ Centre as having suffered the most damage.
The damage was obvious to those walking the streets. Some were cast out of hotels, others came out to escape the city centre.
While structures appeared to withstand the worst of it, cement and plaster and other materials covering the bones of the buildings was loosed to the streets below. In some cases, they crashed through glass awnings to shower footpaths with chips amid the rubble.
From the civil defence bunker, Acting Civil Defence Minister Gerry Brownlee urged Kiwis to seek each other out.
"The sort of holding hand you can put out to anyone who is distressed would be very welcome."
Winston Peters, Jane Smith, Mike McIntyre, Warwick Catto and Jamie Strang.