Streets and homes in the bushfire-threatened town of Cooma were flooded last night after a tank burst, dumping 3.5 million litres of water on some areas.

Key points: Cooma, in NSW's Snowy Mountains, has been threatened by fires

Cooma, in NSW's Snowy Mountains, has been threatened by fires However, yesterday there was an emergency of a different kind

However, yesterday there was an emergency of a different kind Police are investigating the cause of the water tank explosion

The tank, one of two on a ridge north of the Snowy Mountains town, exploded shortly after 9:00pm, sending a deluge into about 20 houses.

A woman sustained minor injuries.

Pictures posted on Facebook show the destruction, with streets left in a state of disrepair and houses inundated with mud.

The damage caused by the flood was particularly evident at one home, which had the concrete slab of its driveway warped and lifted clean out of the ground.

Cooma was surrounded by several bushfire emergencies yesterday, and the sky was blackened at one point by a thunderstorm generated by the blazes.

This home in Cooma was flooded when a town water tank burst. ( Twitter: @tiffgenders )

Some areas remain flooded, and one resident said their car was swept 800 metres down a road.

Stephen Rendell, 70, was in his bedroom on Orana Street when the emergency unfolded.

"I felt a jolt on the side of the house that was a car coming down the straight coming into my backyard and knocking out my hot water system on the way," he said.

"I got up out of bed and opened the side door and a car's there.

"Then I went out on the front porch to see what was happening a bit and was greeted by a river of about 60cm deep flowing through my front yard."

The damage to this house tells the story in Cooma. ( Facebook: David Roncelli )

NSW Deputy Premier John Barilaro told the ABC the burst tank was a "massive disaster … on the back of a crisis and the threat of fires".

"This is what we are facing at the moment — drought, lack of water, fires. But we are resilient and we will keep fighting," he said.

"Right now the focus is helping people get back to living their lives, and the long-term is about some work to do with investigation, finding the cause, and may be replacing this reservoir in the future."

A driveway was uprooted by floodwater on one affected street. ( Facebook: David Roncelli )

Council officers are assisting police checking damage to buildings.

"It's an unbelievable set of circumstances," Snowy Monaro Regional Council chief executive officer Peter Bascomb said.

"Nobody was seriously injured but yes, there are a couple of houses that have been seriously damaged."

The water tanks near North Cooma, one of which exploded, seen from above. ( Google Maps )

The town still has drinking water via a second tank, which received no damage during the incident.

Police are investigating what caused the tank to explode.