Yallourn Power Station's coal supply has been affected after torrential rain in Gippsland forced a conveyor belt in the adjacent open cut to shut down.
A spokesperson for TruEnergy confirmed this afternoon a supply line had been closed after water from the Morwell River leaked into a tunnel housing the conveyor belt.
The spokesperson said an exclusion zone was created around the leak site.
After initial inspections and ongoing monitoring of river and leakage levels, restricted mine operations resumed this afteroon.
A Yallourn employee told The Express mine workers were ordered to assemble at an evacuation point after the incident for a head count and safety briefing this afternoon.
The worker said he was "quite shocked" to hear of the incident, considering how recently the conveyor belt tunnels were constructed.
The Morwell River was diverted through the Yallourn East Field Mine on an embankment during a mine extension last decade, housing the four conveyor belt supply tunnels underneath.
Authorities, including WorkSafe and Department of Primary Industries have been notified of the incident.
The spokesperson said it was too early to provide any more information.
In 2007 the north side of the open cut collapsed, spilling billions of litres of water from the Latrobe River into the mine, destroying two conveyor belts and a mining road, halting coal production and reducing Yallourn's power generation capacity.