The Queensland Fire Department is providing specialist advice to help identify the substance.
Water company IAWAI said a fuel odour had been reported earlier in the day and it was working with Fire and Emergency and Waikato District Council to flush wastewater pipes.
“There is no impact on drinking water or stormwater networks, and no issues with drinking water quality,” an IAWAI spokesman said.
Fire and Emergency said the nature and source of the substance were not yet known.
“Other members of the public should stay away from the area until further notice.”