In a statement, it said: "County dispatch reported the imminent failure of College Lake Dam".
The fear of widespread flooding was triggered by a deluge in rain-soaked Virginia that brought up to 3 inches of rain in one hour to the Lynchburg area Thursday.
A flash flood watch is in effect in the area until 11 a.m.
Local outlet WDBJ7 said a number of people whose homes were deemed to be at risk had been evacuated to nearby schools, along with their pets.
Lynchburg, Virginia, is located in the Blue Ridge Mountains, about 50 miles from Roanoke.
Parts of Lynchburg, Virginia, have been evacuated as floodwaters have compromised the integrity of a dam upstream.
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There is some good news in the forecast: Following two weeks of relentlessly wet weather in the eastern US, a drier weather pattern will move in over the weekend and into early next week, AccuWeather said.
In a dire warning Thursday night, the National Weather Service reported the College Lake Dam could fail, and if it does, "the water depth at Lynchburg could exceed 17 feet in 7 minutes".
The dam was built in the 1930s by the Virginia Department of Highways and is now listed among "high hazard dams" in need of fix in Virginia.
The dam was inspected last week, and they didn't find any cause for concern. More recent projections have placed the fix costs at $10 million. The city knew the dam couldn't handle 2 feet of rain, the maximum it was supposed to be able to cope with, Perrow says.
In 2014, officials launched an investigation to determine the safety of the dam after a city engineering study raised alarms that it posed a possible hazard to residents living downstream.
Given the condition of the dam and the state of the lake, Perrow says, the most likely "fix" isn't actually a repair - he says the city is likely to tear the dam down completely and replace it with a bridge.