A state of emergency has been declared in Fiordland after flooding cut off the only road out of Milford Sound, leaving more than 380 people stranded.

State Highway 94 between Te Anau and Milford, dotted with slips and flooding, is closed and expected to remain so for several days.

The visitors' carparks and terminal in Milford Sound are flooded and staff are monitoring ponds in the area.

The Transport Agency said the highway - the only road in or out of Milford Sound - would remain closed throughout today and into tomorrow morning.

The next update was not expected before 1pm tomorrow.

Southland Mayor Gary Tong said the state of emergency applies to Milford, Te Anau and Manapouri.

Several vehicles have been spotted on State Highway 94 and emergency services will be flown into the area by helicopter to check on the occupants.

Milford Track was cleared during the weekend, but Tong said people may be on other tracks in the area.

Emergency Management Southland controller Angus McKay said the 382 people in Milford Sound, including staff and visitors, were either in Mitre Peak Lodge or on the tourist boats.

"They have plenty of food and are safe and warm," he said.

"The Cleddau River and high tides had caused flooding this morning and staff were monitoring the expected rainfall and tides throughout today and tomorrow, when more heavy rain is expected in the early morning.

"No one is on the Milford Track as it was cleared at the weekend.

"Milford Road is likely to be closed for some days because of slips and flooding damage. Milford Road Alliance staff are checking the road for vehicles."

The Invercargill emergency centre has been activated.

MetService issued a heavy rain warning for the area with a further 100 to 250mm of rain forecast to fall on top of what had already fallen.