Water restrictions are in place in the Southland town of Winton.
A supply line has ruptured and contractors have shut off the water supply to the entire town.
All discretionary use of water should be avoided wherever possible, residents have been told.
"Where health and hygiene is concerned people should still wash their hands if they need to," Southland District Council said in a statement.
"This situation is critical and water may be off for up to five hours while repairs are carried out.