Residents in Henley, south of Dunedin are being advised to evacuate due to a massive deluge across Otago and Southland.
Heavy rain and snow has been battering parts of Otago and Southland since Monday.
Dunedin City Council Civil Defence Controller Sandy Graham says residents have been advised to evacuate.
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Police started door-knocking properties on Tuesday advising them to evacuate and telling them to be prepared to be out of their homes for several days.
At least 20 properties could be affected by flooding, but at this stage residents have decided to stay in their homes.
Access to the town has been limited with one road already closed due to a slip.
Heavy rain caused havoc across the regions on Tuesday, forcing roads to close and causing widespread flooding.
In Middlemarch, raw sewage has overflowed on to the streets.
Tap and Dough bistro owner Norma Emerson told Newshub she was forced to close her cafe because of the wastewater spillage.
"We can't even reach our front door to be honest, because of wastewater we believe is raw sewage," she says.
The Otago Regional Council is monitoring river levels across the region in case they burst. The Taieri River at Outram has reached its third flood warning due to rising water levels and the spillway is operating.
In Dunedin, a number of suburbs are flooded due to the rain.
Residents in Ravensbourne and Mosgiel have been hit hard with surface flooding.
The council has opened an emergency operations centre to monitor flooding across the city.
Heavy rain is putting pressure on wastewater systems, increasing the water flow amounts.
Residents are being asked to cut back on showering and using washing machines to ease pressure on wastewater systems.
Mosgiel and south Dunedin residents who are concerned about flooding can collect sandbags from the Memorial Park or Hotel Taieri car park in Mosgiel.
And for south Dunedin residents, sandbags can be picked up from the Ice Stadium car park.
NIWA meteorologist Ben Noll told Newshub the worst of the rain was going to hit on Tuesday afternoon.
Interior Otago and Canterbury could see up to 75mm fall on Tuesday, and more heavy snow is expected, he says.
MetService has warnings in place for between 5-10cm of snow to fall above 700 metres.
This comes as police warn people across Otago to avoid non-essential travel as the deluge inundates the region.
Five State Highways are currently closed due to flooding, and the New Zealand Transport Agency has area warnings in place for a number of roads due to flooding and slips.
The bad weather is expected to ease across the South Island by Wednesday.