Waitaki Mayor Gary Kircher said the small sinkhole — about 1.5m deep — in front of St Patrick’s Basilica was in an area that "is a bit problematic with under-runners".
"Our team needs to have a closer investigation but the initial expectation is that’s what the cause of it is," Mr Kircher said.
"It’s just one of these things — it’s not quite routine maintenance but it’s something that does happen occasionally."
In the meantime the situation was "all under control" and the problem area was fenced off. Police alerted the Waitaki District Council’s roading contractor about the sinkhole just before the new year, he said.
"Until the roading contractor and our roading team have more of a full complement on board next week, there wasn’t any need to rush in and do too much at the moment.
"The crews that are on are better dealing with the more immediate things. This will get some attention next week and be investigated a bit further."