The entire town of Edgecumbe's been told to leave immediately because of a breached stop-bank.
The exact number of people being told to leave their homes for higher ground isn't clear but it could be as many as 2000.
The Whakatane District Council says the stop bank on College Road has been breached and water is flowing through.
People caught out by rising flood water now swamping the town are being told to ring 111 if they need help.
Mayor Tony Bonne said buses will take people from the fire station, and welfare centres are being set up in Kawerau and Whakatane.
He is calling it a very serious situation and is appealing for people to get out immediately.
It's a one-in-500 year flood event, he said.
Council spokesman Ross Boreham said police and fire were going house to house telling people to leave immediately.
"Most of the town we'll be asking to leave to head to higher ground or go to friends and family where they'll know they will be safe."
Whakatane District Council says anyone who has not yet evacuated and requires assistance should call emergency services.
Those fleeing the stricken town are being advised to head to Firmin Lodge in Kawerau which has become the area's welfare centre.
In Whakatane, people are being told to go to the Salvation Army and the War Memorial Hall.
Red Cross disaster management officer Gavin Newton says roads into Whakatane are becoming congested, and motorists need to take extreme care.
He says a number of roads are affected by slips and flooding, and anyone that doesn't need to travel should stay off the roads.
There are no plans to close the bridge into Whakatane, but people are being urged not to stop on it.
Four Red Cross teams are making their way to the area to help support emergency services and the Salvation Army.
The public were being asked not to contact the Whakatane Hospital if they required prescription medications as this was causing congestion.
Some evacuees had left their meds at home in the rush to leave and were turning up at the hospital accident and emergency department for replacement supplies.
Rotorua woman Deeana Tubb, who has lived in Edgecumbe for two years, said there were no words to describe the situation.
"The rain was pretty constant last night but this morning it was beautiful sunshine. In a decision I now deeply regret I went to work. I was halfway to Papamoa when I heard Edgecumbe residents were being evacuated. I turned around because my children were at home... I went right through the cordons at Matata - nothing was stopping me getting to my babies.
"When I got home the water was already waist-deep in the streets. I managed to get some valuable documents out of the house and everyone else and we headed to Awakeri.
"Now it looks like we're about to lose everything."
Tubb said she had never seen anything like this before.
"I'm worried sick. There's really no words, as the panic subsides the shock is setting in.
"The most important thing is that everyone has got out safe... Now we just need to put one foot in front of another and get through this."
Several schools will be closed around Edgecumbe today as residents evacuate.
Otakiri School, Te Whare Kura o Ruatoki, Edgecumbe Primary, Edgecumbe College and Taneatua School won't open today, Radio 1XX reported.
Additionally Uzabus will not be running buses today, which affects Kawerau South School, Tarawera High School and Te Whatatau School.
The Opotiki bus service will still be running in Opotiki, but not from Opotiki to Whakatane, Radio 1XX reported.
Businesses say sales have dropped since the road was made one-way.