Sydney's giant Warragamba Dam is spilling for the first time since 2013, in the wake of days of heavy rain in the region.
Authorities have warned of flooding in low-lying areas near the dam but don't expect any homes to be at risk.
Residents south of Sydney are still waiting to return to their flood-affected homes after the wild weather.
Emergency crews have warned locals in the city's south and west they may find roads and bridges cut off.
The dam, about 70km west of Sydney, is the largest urban water storage in Australia, supplying about 80% of the Sydney region's drinking water.
The Bureau of Meteorology said most of the dam's spill would happen on Thursday afternoon and early evening.
"We don't anticipant any properties to be flooded," the bureau's Gordon McKay told the BBC, but adding that low-lying farmland was at risk.
The Sydney Catchment Authority said Warragamba Dam will spill for several days through its central drum gate.
The Authority will then lower the water level of the dam to just below full as part of normal post-flood procedures.
Evacuation orders for 320 properties in St Georges Basin and Sussex Inlet, about a 190km south of Sydney, are still in place.
There have been nearly 90 flood rescues of people and animals since severe weather first lashed the greater Sydney region on Monday.
The State Emergency Service (SES) is assessing damage in the area amid unconfirmed reports of loss of livestock.
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