A water main was damaged in Fitzroy Street, Goulburn on Tuesday afternoon.
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The break is causing an outage affecting all areas of Marys Mount, Wollondilly Gardens, the Police Academy, Wollondilly Public School and Crestwood.
Goulburn Mulwaree Council is mobilising a team to undertake urgent repairs. A spokesman said crews would endeavour to fix the break within the next few hours.
“We are currently draining the pipes to allow that to happen,” he said.
The break occurred in a residential subdivision under development. The council confirmed that the same contractor also broke a water main in late June working on the same subdivision. That break affected a large area of Marys Mount and Crestwood.
The council is keeping the community updated via its Facebook page.