Thousands of people are evacuating Kerang in northern Victoria as engineers race to reinforce the flooded town's main protection levee.

Walls of water kilometres wide are flowing across the north and west of Victoria in the wake of record rainfall last week.

Kerang is protected by a dirt levee, but authorities say some water is seeping underneath and all 4,500 of the town's residents should evacuate.

A huge body of water is flowing down the Loddon River towards Kerang. A number of properties have already been inundated outside the town.

And further west at Warracknabeal, residents have emerged from their barricaded homes to find their town hit by a record flood.

But the SES is hoping the flood might not be as bad as had been feared as the levee protecting Warracknabeal appears to be holding up.

Engineers from Melbourne have arrived and are assessing the Kerang levee's strength.

SES spokesman Lachlan Quick says much of Kerang could become inundated if the levee breaks.

"There is a major concern about the integrity of the levee bank which protects the town," he said.

"It has held for many, many years but we are facing an unprecedented volume of water."

A lack of historical data is causing difficulties for authorities, unable to pinpoint the timing of record flows in at-risk towns.

Even then, Mr Quick says there are no guarantees floodwaters will recede immediately.

"We've got to stress this, that just because they peak, the waters will remain very high and very strong for a number of days," he said.

Kerang Mayor Max Fehring is urging calm as mass evacuations continue.

"We're encouraging people to take heed of that because we can do it in an orderly manner at this point in time," he said.

People are being advised to leave the town and move to relief centres at Cohuna and Barham before the only road out of Kerang is cut.

Kerang resident Adam Cooper, who is at the Cohuna relief centre, says he received a text message to evacuate about 5.00am (AEDT).

"[There were] quite a few on the road as we were leaving, but I think I'm one of the first to get to Cohuna," he said.

"There's only a few here at the moment but I expect there will be more coming soon."

Mr Cooper has prepared his house as best he could.

"If they're going to go under, it's going to go under," he said.

"Some of the bits I didn't worry about, like the couches and stuff, but most of the electricals [are] up high so you just hope that if it does come in, it doesn't go too high.

"But there's not much you can do."

Work is also continuing in Kerang and Horsham to protect two key substations that supply much of western and north-western Victoria and some parts of south-western NSW with power.

SP Ausnet spokesman Jo Adamo says protective walls around the Kerang station are bearing up well and the company is cautiously optimistic.

But he is warning all residents to remain prepared for potential outages.

"We just ask people to be patient. We understand this is a very nervous situation," he said.

"We're waiting and we're hoping the mitigation work we're doing is sufficient, but we want people to be prepared in the event that they need to construct further plans."

Evacuations

Around 20 people have spent the night at a relief centre in Warracknabeal, in the Wimmera, as the Yarriambiack Creek nears its peak.

About 80 houses are at risk, but so far a temporary levee is holding.

Warracknabeal has already had half its annual average rainfall in just a week. Yarriambiack Creek has been virtually dry since 1996.

Yarriambiack Shire chief executive Ray Campling is coordinating efforts to help save the town from flood.

He says Warracknabeal did not get much warning.

"We were advised the peak would be here on Friday, but it's arriving tomorrow," he said.

"So that put our plans out, but fortunately we were pretty proactive and ready to go anyway."

Peter Shilling has lived in the town for more than 40 years and never thought he would be preparing for a flood of this kind.

"The levee bank out here is going to stop a certain extent," he said.

"If the levee bank breaks we don't know what will happen.

"It's just sandbags are probably just protection for our houses and that."

SES incident controller for Warracknabeal Steve Warren is unsure if the scramble to protect homes will pay off.

"I'm not sure whether that temporary levee they've put in there will actually hold it back. I hope it does," he said.

"There's going to be a large weight of water against that wall. The chances of that actually surviving this event are... going to be a lower percentage, but I hope it does."

There are also concerns for up to 100 homes in Quambatook.

Floodwaters receding

In western Victoria, Horsham has begun to clean up parts of the town as floodwaters recede.

But at least 16 houses in Horsham were inundated overnight and the SES says hundreds more properties are surrounded by water.

Meanwhile, the Mallee town of Beulah, on the Yarriambiack Creek, is also a concern for emergency crews in coming days, Mr Parker said.

"We're also mindful of what impact all this water will have on the Murray River," he said.

"We're concentrating on preparation work in smaller communities along the river to keep the water out."

The Wimmera River is expected to peak in the town of Dimboola, downstream from flood-hit Horsham, home to about 1,800, on Thursday and at Jeparit further north the same day or Friday.

Further south, riverside business operators in Nelson are bracing for floodwaters to make their way down the Glenelg River.

Brett Carson runs a boat hire business and leases its sheds from the Victorian Government in the far south-west town.

He says the sheds along the river flood up to six times a year when big flows coincide with rising tides at the mouth.

Mr Carson says he would be happy to pay to put his business on a floating pontoon, but state law forbids it.

"The boats bang around on the landings, could actually float up on top of them," he said.

"We've got all the gear up and out the way so it doesn't get damaged and that costs a lot of money in January. January we sort of need to survive."

- ABC/AAP

Editor's note (February 3): the initial story incorrectly reported that Kerang and Warracknabeal had not seen floods like this "since European settlement."