NSW Fire and Rescue, police and ambulance were called to the entry of the former Saint John's orphanage at 3pm Monday.

Inspector Matt Hinton said a Mundy Street resident was pulling out a tree when he ruptured a gas line, triggering the leak.

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A NSW Fire and Rescue spokeswoman said two crews responded to the incident at the former boys' home.

Goulburn station officer Darrell Law confirmed the person was working inside the orphanage grounds when the rupture occurred. The pipe was external to the building but ran underground through the orphanage premises.

Earlier a NSW Fire and Rescue spokesperson said there was significant amount of gas in the air but no homes had been evacuated as they were located in the opposite direction to which the wind was blowing.

Mr Law told The Post there was no danger to residents.

Scott Reid Plumbing, a contractor for the gas company, was on scene quickly and capped off the pipe before rendering it safe. Gas readings were taken around the premises.

This month, Goulburn Mulwaree Council said it was taking legal action against the orphanage owner for failure to demolish the fire-damaged main building by a January 31 deadline. Other demolition has taken place onsite.

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