Dunedin City Council projects engineer Evan Matheson said the trees were to be planted as part of a council beautification project for the city's warehouse precinct.
He said contractors usually checked for underground services before digging holes, but not this time.
It was unclear why the contractor, Downer in this case, had failed to check, or advise workers of the buried services.
No-one was injured.
Both organisations were obviously concerned it had happened, though such mistakes were rare, Mr Matheson said.
''To be fair, they [Downer] have managed around a lot of service conflicts on this and other projects. This one just slipped through somehow.''
The trees would be planted in in other parts of the street, Mr Matheson said.
Downer would cover the cost of the work and the asphalt, while the council would retain ownership of the cobbles and the metal framework for the tree pit, which would be reused elsewhere in Bond St, once a plan was worked out.
The council last year approved $80,000 for beautification work in Bond St as part of the warehouse precinct revitalisation project.
