The Grey District Council closed all entry points to the CBD at 11am, after bow waves from cars threatened to flood parked vehicles.
Mayor Tania Gibson said the council activated the emergency plan and decided to shut the town, with contractors stopping traffic.
"Vehicles are pushing water into cars," she said.
Most streets reopened about 12.30pm.
Regent Theatre staff started contacting patrons as the water level rose to the bottom of car doors.
As cars drove past in the floodwaters, water reportedly lapped into some vehicles. Although it came close, the water did not inundate any premises.
In doorways, shoppers took shelter waiting for the rain to stop — but it continued unabated for about an hour.
After a month of almost ceaseless sunshine, the dry spell broke with a huge crack of thunder mid-morning.
The severity of the rainfall took everyone by surprise. The Greymouth rain station temporarily stopped issuing updates from about the time the deluge hit, making it unclear how much had fallen. It came back online about 11.30am, showing 31mm for the previous hour, and 44mm in six hours.
MetService meteorologist John Law said a thunderstorm that came through brought the localised downpour, with "intense bursts".
Some heavy showers also fell inland. Mr Law said the slow, warm, moist air mass had created a perfect combination.
"There could be more thunderstorms this afternoon — hopefully rainfall into the Grey River. [It will] turn a lot wetter at end of the week."
At Alf Harrison Menswear, John Gilshnan said it was "a heck of a downpour".
"We don’t cop it as much on this side [of the road]."
Fire and Emergency New Zealand was stopping traffic entering the town about 11.30am.
Some rain fell in the parched Grey Valley. Ngahere got 32mm in the 24 hours to 11.30am, and Mawheraiti 16mm. Haupiri fared less well with just 5.4mm. Hokitika had 25.6mm.
By: Laura Mills
