Engineers have blown up a levee in the US midwest, hoping to save a historic town from destruction by raging flood waters – but condemning a vast expanse of rich agricultural farmland.

Late on Monday night, the US army corps of engineers began detonating charges embedded in the levee at Birds Point, Missouri, in order to create a 610-metre (2,000-ft) breach. The blasts were expected to lower the waters of the Mississippi river by up to 1.1 metres, thus sparing the city of Cairo, Illinois. But the breach in the levee was also expected to submerge 53,300 hectares (130,000 acres) of rich farmland in water, sand and silt. Ninety homes were also at risk.

The decision – which has been fiercely contested in the courts – set a fading town of 2,800 mainly African American residents against relatively well-off farmers. "Making this decision is not easy or hard," Major-General Michael Walsh, commander of the army corps, told reporters. "It's simply grave – because the decision leads to loss of property and livelihood, either in a floodway or in an area that was not designed to flood."

By Tuesday morning, the water levels surrounding Cairo had fallen to 18.4 metres, from 18.8 metres and rising before the breach. The national weather service said the river was expected to recede to 17.9 metres by Saturday.

But a great swathe of farm country was being slowly flooded in muddy water. A village called Pin Hook was completely flooded. Farmers in Missouri said the blast would destroy an entire year of crops.

"It's a sickening feeling," said Bob Byrne, who farms 550 acres below the levee. "They're talking about not getting the water off until late July or early August. That knocks out a whole season."

Walsh has also indicated that he may have to blow up other levees downstream to try to contain the worst flooding in the area since 1927.

Cairo, which lies on the confluence of the Mississippi and Ohio rivers, was an important steamboat port in the 1800s, and served for a few months as the headquarters for the union armies of Ulysses Grant early in the civil war. But the town is long past its heyday, and the decision to save Cairo outraged Missouri farmers and state officials who had fought to block the levee demolition in court.

Stephen Tilley, the speaker of the Missouri house, even went so far as to suggest that the town was so dilapidated as to be expendable. When asked by a reporter which he would rather see underwater, the town or farmland, Tilley replied: "Cairo. I've been there. Trust me, Cairo."

He added, "Have you been to Cairo? OK, you know what I'm saying then."

But the legal battle was exhausted on Sunday night when the US supreme court refused to hear an emergency appeal from Missouri's attorney general.

By Monday afternoon, with more rainfall straining the 19.5-metre floodwall, the town was deserted. Almost all of the residents had already been evacuated, and were waiting to see if the homes they had left behind would be saved or left for the flood waters.

"It was equal to having been in Vietnam," said Mattie Woods, 63, who was born and raised in the town. "We have had flooding before, but we have never really faced total disaster. This one was full devastation for all of us."

A number of people who tried to return for belongings on Monday were ordered to go back. "They just weren't letting anyone in," said Eddie Smith, another Cairo resident.

Smith had left his home after spending several anxious days watching the water rise around the tyres of his car. By the time he left on Tuesday last week, "the water was coming right up to the front step," he said. "I've never seen the river do this before."

Members of the Illinois national guard were deployed filling sandbags, and packing explosives into pipes embedded in an area of the levee downriver from Cairo.

The army corps of engineers was planning a second series of explosions on Tuesday to try to divert the water from the farmland that contain corn, wheat and soybean crops back into the Mississippi.