Jamberoo Mountain Rd will be closed for weeks and may take several months to be fully restored following a landslip caused by heavy rains on Monday night.
"[It] has geotechnical issues due to the steep terrain, rainforest environment and loose soil structure," a statement from Kiama Municipal Council said.
"The area of the landslip is particularly problematic as it is close to a natural gully. The recent heavy rain scoured the soil under the road, and caused the failure of a retaining wall."
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The large slip has as significantly damaged the road across both lanes.
"Our engineers, with assistance from Wollongong City Council and the University of Wollongong, are conducting tests and monitoring the damage as the weather dries out," the council said
"This will determine the stability of the site, and what repairs are required. The road will remain closed for a number of weeks at least."