The cause of a gas leak at a construction site in North Bondi, on which a petrol station previously stood, has been isolated and the damaged line has been sealed off.
"The incident has been shut down," NSW Fire and Rescue superintendent Ian Krimmer said.
One southbound lane and all northbound lanes have reopened on Old South Head Road between Curlewis Street and Warners Avenue, the Transport Management Centre says.
One southbound lane remains closed, but Curlewis Street has reopened.
People were allowed to return to evacuated buildings.
Emergency service crews were still at the scene, but there was hope it would be deemed safe soon, a Fire and Rescue NSW spokeswoman said.
At the height of the alarm, there were fears the gas leak could become explosive.
Old South Head Road was closed between Curlewis Street and Warners Avenue and motorists were advised to use New South Head Road.
Route 386 and 387 buses were diverted from the area.
State Emergency Services and Roads and Maritime Services crews and representatives of the gas company were at the scene.
Superintendent Krimmer said there were no reports of injuries.
A spokeswoman for Fire and Rescue NSW said two buildings, one on either side of the construction site, had been evacuated as a precaution. Fifteen people were involved.
"A gas line had been ruptured," the spokeswoman said. "We have crews who are monitoring the spread of the gas."
The triple-0 call was placed just before 1pm, she said.
- with AAP