Water from the dam flooded a section of road late on Wednesday afternoon, at the intersection of the Ida Valley-Omakau and Poolburn-Moa Creek Rds.
That section of road was closed overnight and a detour put in place because of concerns more water might spill from the dam, Central Otago District Council roading engineer Scott Graham said.
Regional council environmental monitoring and operations director Scott MacLean confirmed yesterday the council was investigating the matter because of its functions under the Resource Management Act and the Building Act.
''Until those investigations are complete it is inappropriate to comment on any potential action or outcome,'' he said.
He confirmed the dam was on farmland and said why it failed was unknown.
No residential properties were threatened and the spilled water went over pasture owned by the dam owner and across the road.
The dam was not full but was ''substantially full'' when it failed, he said.
He declined to give details on the size of the dam or the volume of water it contained.
The dam was now empty, so it did not pose any further risk associated with the uncontrolled release of water.
The possible discharge of sediment into a waterway was one of the things the council would consider in its investigation, along with the Building Act as it related to the dam. Mr Graham said the section of flooded road reopened yesterday morning.
There was still ''a wee bit'' of surface water on it, but there were no further concerns about more water spilling.
Although the council had incurred some costs in re-directing traffic and unblocking some culverts, he had no idea yet how much that exercise cost.
It was too soon to comment on the possible recovery of costs.
The Otago Daily Times understands the dam was constructed recently.
