Authorities had expected the river to peak in Maryborough above a major flood level of 10.5 metres, impacting about 80 homes on Sunday afternoon, after the remnants of tropical cyclone Seth dumped 600mm on the Wide Bay-Burnett region in two days.
The levee was protecting the CBD until an underground stormwater valve failed just before 2pm, allowing floodwater to surge up through the drains and into the streets.
Police and Queensland Fire and Emergency Services have issued an urgent emergency evacuation order for more than 30 inner-city blocks.
"The Maryborough CBD will be directly impacted by the major flood event," QFES said in a statement.
"The water behind the flood levy has backed up behind the level of the flood barrier.
"The underground valve on the dry side of the levy has been damaged resulting in immediate flooding in the Maryborough CBD.
Anyone in the CBD area has been urged to move immediately to higher ground.
One person has already died in the floods, which came after intense rain pummelled the region on Friday and Saturday.
A 22-year-old's body was found in a submerged ute at Kanigan, north of Gympie, on Saturday.
Police also hold grave fears for a 14-year-old girl swept away while abandoning a flooding car with a 40-year-old man at Booubyjan, near Gympie, in the early hours of Saturday.
The man was found clinging to a tree hours later but police are combing the floodplain for any sign of the girl.
"This is a very, very difficult environment, we are unable to get in there and conduct that search appropriately at the moment," Deputy Commissioner Steve Gollschewski told reporters on Sunday.
"It is going to take some time for us to do that."
Police have received 177 calls for help, while QFES have responded to 51 water-related incidents and made nine rescues.
QFES Deputy Commissioner Mike Wassing urged people not to enter floodwaters or go sightseeing in Maryborough, where a local photographed a bull shark on Saturday.
"I do want to remind people about the dangers of floodwaters," he said.
"We've had the shark in the park, we've got contaminated water, you've seen what can occur with roads in the local areas and how dangerous that is," he said.
"Albeit the rain has stopped, the risk remains."
Meanwhile, a low pressure system in the Coral Sea has been confirmed as a category one tropical cyclone called Tiffany which is expected to cross the Queensland coast on Monday night.
Tiffany will continue to intensify as it approaches the far north Queensland coast, making landfall between Cooktown and Lockhart River.Â
The tropical cyclone is then expected to move into the Gulf of Carpentaria, potentially intensifying before impacting areas of the eastern Northern Territory from Wednesday.
Earlier on Sunday, Premier Annastacia Palaszczuk said emergency services were readying for the cyclone.
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