A river of water has devastated the Scenic Hotel at Franz Josef Glacier, smashing windows, tossing cars around and leading to a mass, late-night evacuation.

The Waiho (Waiau) River started changing course soon after dark during heavy rain, and eventually punched through the stopbank about 700m north of the main township at 11.50pm. The glacier-fed river is now running straight through the hotel site, alongside State highway 6.

Franz Josef township itself is not affected, although the town sewage ponds were also wiped out by the swollen river.

Seventy people - 60 staff and 10 tourists - were evacuated from the hotel, the former Franz THC and now known as the Mueller Wing and Haast Bar. It is mostly used for staff accommodation for Scenic's other hotel at Franz Josef.

At 1.15am, the water reached the nearby Top 10 Holiday Park next to the school and kindergarten, and 100 tourists were evacuated, and a further 16 were evacuated from the Westwood Lodge across the road.

At 2am a local state of emergency was declared, enabling extra resources to be sourced from throughout the South Island.

Franz Josef fire chief Mike Charles said they were first called out at 9.30pm as the stopbank started to crumble. It finally broke through about midnight, and the gap got "wider and wider".

"The full force of the river was flowing (through)," Mr Charles said.

At its worst, the water was 1.5 to 2m deep, and at 10am today the river coursing through the hotel site was about 20m wide.

As they got people out early, there was no need for boats, Mr Charles said.

"We did the hotel first as it's right in the firing line."

Flood waters flowing through the Scenic Circle hotel at Franz Josef Glacier. pic.twitter.com/9MQMdSwQtO — Ian James (@ILJames) March 23, 2016

The Top 10 Holiday Park followed. The Westwood Lodge was not flooded, but water ran down the side and it was evacuated as a precaution.

Mr Charles said two or three cars at the hotel got "washed around", but they had time to get the vehicles out of the holiday park.

At one stage the water backed up and began to run down the state highway. He said the event was planned for, and it all went according to the civil defence plan.

Glacier Country Helicopters pilot Gus Gordon flew over the site this morning and said there was a lot of water through the hotel, and the sewage ponds had been destroyed.

"There's a lot of cars and machinery they've not been able to get out," Mr Gordon said.

The river channel was running 100 to 150m wide over land, he said.

Franz Josef civil defence co-ordinator Wayne Costello said the Mueller Wing was evacuated in just 45 minutes thanks partly to staff, with some residents driving to the welfare centre, and others on buses from Franz Josef Glacier Guides.

Mr Costello said the stopbank started going "piece by piece by piece"until there was a major river flowing through.

"We watched it come into the hotel, it started coming in really, really rapidly."

The Westland District Council put a digger in the riverbed at first light, using rock made available by the New Zealand Transport Agency.

Franz Josef Glacier School principal Janet Ristow said the school and Kidsfirst Kindergarten were safe but closed for the day.

She said the Mueller Wing had water still halfway up the building at 7.45am today.

"The Mueller is just a washout," Ms Ristow said.

The water was flowing "hard and fast".

Although the campground next door to the school was flooded, the school escaped because it was "just a little higher".

The water was now running around the back boundary of the school.

"We are a bit of an island."

Scenic Hotel Group managing director Brendan Taylor said they got everyone out between 10 and 10.30pm before the river burst through.

Electricity was still on to the flooded site this morning "so it's a little bit of a dangerous situation".

"We moved most of the staff up into the hotel in Franz Josef. The guests, we were able to put them into the other two hotels in the middle of town."

Mr Taylor said they would be looking at rehousing the staff over the next two to three days.

Once the water level dropped, they would bring in the assessors to work out what damage had been done.

The highway was closed for two hours but reopened at 4am after the floodwaters began to drop.

Franz Josef had 158.5mm of rain in 24 hours, with the heaviest falls between 11.30pm and 3am, regional council data shows.