The Otago Regional Council predicted yesterday the lake could reach 279.9m above sea level (ASL) by late last night or early this morning.
Last night at 7pm it was at 279.265m, 13.5cm below the first flood alert level.
Wanaka's flood alert plan for the central business district swings into action at 279.4m and a flood is possible at 280m, the level recorded in 1985 when the lake spilled into Ardmore St.
Water inundated Ardmore and Helwick Sts again in 1999, when the lake peaked at 281.3m.
Otago Regional Council duty flood manager Mike Goldsmith said yesterday the predicted 279.9m peak was a "worst-case scenario".
The prediction was based on the maximum rainfall forecast for the back country.
Wanaka Community Board chairman Lyal Cocks said yesterday he was feeling "a bit anxious" about the prediction and was keeping a close eye on the levels.
"There is not a lot of leeway there."
Wanaka Chamber of Commerce representative Leigh Stock spent yesterday liaising with the council and shopkeepers regarding lake levels.
"We are ready to move as soon as we get the first warning," he said.
In the meantime, it was business as usual in the town, as holidaymakers flocked to cafes and shops.
The Clutha River was in flood at Albert Town, near the confluence of the Hawea and Cardrona Rivers, yesterday and the flow steadily climbed throughout yesterday to 691cumecs. by 7pm, creating dangerous conditions in the willow-lined river.
Lake Hawea reached 344.4m ASL yesterday afternoon and still has some storage room, with the statutory maximum lake level set at 346m.
The Hawea River was flowing at a stable 13cumecs.
The Southern Lakes Multisport Club has moved today's Clutha Classic Kayak race to the Matukituki River, with a final call on conditions to be made at a race briefing in Wanaka at 7.30am today.
The Hawea Picnic Racing Club cancelled yesterday's annual race meeting at the Hawea Flat Domain, the first time this had happened in the history of the event.
Water completely covered the Roys Bay jetty and was up to the base of Lakeland Adventure's log cabin but employee James Blunt said it was hoped the business would be spared from having to move its equipment.
With back country rivers at high flow, Mr Blunt expected the lake to continue rising for the next 24 hours.
The flow indicator at the Matukituki River, which feeds into Lake Wanaka, indicated things were settling yesterday morning, as the river had dropped from about 580cumecs on Monday night to 268cumecs by 3pm yesterday.
There is no flow indicator on the Makarora River, another main source of the lake and Clutha River system.
At least 110mm of rain had fallen there overnight to 8am yesterday before the rain began to ease.
The Crown Range was closed yesterday morning because of slips, but reopened at noon.
A car slid off the road near Cardrona yesterday morning but no-one was injured.
There was flooding on State Highway 6 between Haast and Harihari, and a slip on the highway between Fox Glacier and Franz Josef closed the road for several hours yesterday morning.
