A Dunedin City Council spokesman said the council was aware of a sinkhole under the road in the area caused by the failure of a piped watercourse during the heavy rain at the start of last month.
The spokesman rejected a claim there was an issue with the wastewater network at the site.
"We've been working in the area for the last three weeks, including using a suction truck to remove sand from the work site, but to date there is no sign of wastewater contamination or of wastewater finding its way into Otago Harbour," he said.