Motorists that drove through the geothermal activity in Lake Rd this week are being "strongly advised" to clean their vehicles because of the acidic mud.
The geothermal activity in the median-strip garden in Lake Rd near Kuirau Park has stopped, but there may still be steam in the area as the ground cools.
Confirmation of the cause of the fumarole came after the deep quench of a nearby bore that caused water levels in the fumarole to drop significantly, the council said in a statement.
GNS volcanologist Brad Scott said the geothermal mud may be "acidic in nature" and "cleaning would be strongly advised if mud is on the vehicle".
Scott said many vehicles in the greater Rotorua-Taupō area were regularly exposed to geothermal muds, "so it's sort of business as usual in the bigger picture".
"However, as the dosage is higher than normal we would support washing after exposure, but not necessarily not driving," he said.
Well drillers were being organised to grout the bore shut, which was expected to happen today, the council said.
The council said the section of Lake Rd will remain closed and traffic will keep being diverted down Tarewa Rd.
Council geothermal inspector Peter Brownbridge on Thursday told Rotorua Lakes councillors in an operations and monitoring committee meeting that the incident was "a man-made event".
He said the immediate area was not known for hot ground, fumaroles or springs, and said one of his first actions on Wednesday was cranking three nearby geothermal wells, looking for an effect.
"We have pinpointed one well in particular which we think may have a broken casing at depth."
He said one of the reasons the team looked hard at the wells was that the water was 98C at the surface and kicking up the clays that came from "great depth", which indicated it was "more than just the naturally fed fumarole".
He said rods ran down the suspect well and did a deep quench, which involved injecting large volumes of cold water down it to cool the geothermal activity.
This proved the bore was responsible for the fumarole.
If this were the case, once the bore is quenched, the geothermal thermal activity within the fumarole should stop, allowing it to be filled and the road to be reopened.
He said there was no overflow and the roads have been cleaned, but the two lanes coming into town remained shut.
Councillor Tania Tapsell was concerned the area was not known for fumaroles or producing much heat, and asked if his could signal potential geothermal activity in areas that were thought to not be active.
Brownbridge was "not concerned" this could signal potential geothermal activity in areas that were thought to not be active because this wasn't a natural feature.
"This is, if you like, a man-made event," he said.