A state of local emergency was also issued for the Town of Canmore on Thursday morning and people living along Cougar Creek have been evacuated.
The entire area is under an evacuation order and residents are being asked to go to the Public Works at 100 Glacier Drive where they will be bussed to elevation Place or Canmore Collegiate High School.
Residents south of the pedestrian bridge over Cougar Creek are also being evacuated and other residents are being notified to prepare for possible evacuation.
Three Sisters Parkway is closed as is Elk Run Boulevard over Cougar Creek.
Officials say power to many areas may be affected but the drinking water is still safe to consume.
The Trans-Canada Highway and Highway 1A are closed in both directions at Cougar Creek.
Access to Eagle Terrace is also closed.
Residents are being told to stay clear of the creek as the banks are extremely unstable and are eroding fast.
For the latest information, visit the Town of Canmore website or call 403-678-1551.
(With files from Stephanie Brennan)
