Fire and Emergency New Zealand are at the scene after being called to Gibbston Back Rd at 8.30am, to reports of a slip caused by rain.
A Fenz spokeswoman said no houses were threatened by the slip.
Some driveways and water tanks were affected, she said.
A reporter at the scene said the road was completely washed out.
Workers were at the scene assessing the damage after large boulders and a landslip took out the road.
"The creek on both sides is overflowing," she said.
A power company had been informed as some transformers were partially submerged.
The Queenstown-Lakes District Council had been informed.
