Wanaka's new multi-million-dollar wastewater treatment plant has been temporarily shut down after a series of mechanical malfunctions.
The $19.5 million plant was meant to be fully operational by February, but has only been functioning at half its expected capacity because of equipment problems.
On Saturday night sludge spilled into disposal fields, which are designed to handle water only.
Queenstown Lakes District Council project manager Martin O'Malley said there is no risk to public health, but the plant has been shut down and wastewater is being diverted to the region's original oxidation ponds.
Mr O'Malley said some problems were expected during the plant's start up phase, and he does not know when the facility will operate again.