Twenty-two rooms at the Australian National University's new Fenner Hall student accommodation building will be uninhabitable for the rest of the year and students will be forced to vacate the building.
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The building, which is located in the heart of the university's Kambri precinct, opened at the start of this year's first semester.
Affected students have been told their rooms did not meet required standards after flooding last week.
Environmental condition checks after the flooding took place over the last 10 days.
The Canberra Times understands five residents on one floor were on Monday told they had to leave by Wednesday, while another 17 students across three floors got the news on Wednesday night.
A spokesman for the university said a broken water valve had caused the issue and the required maintenance would take place in the university's summer holidays and the university was working with the builder to address the issue.
"Sections of the room will need to be left to dry for a few weeks," he said.
The university would help students find alternative places to live and pay for any difference in rent, while also offering students places at Fenner Hall next year, he said.
The spokesman said the rooms were safe but the university was ensuring accommodation was of the highest quality.
"The university is working with affected students on a range of alternative accommodation options, including the option of releasing them from their room if students want," he said.
"Students are being offered alternative accommodation on campus, as well as Gowrie Hall on Northbourne Avenue. All residents who are relocated will be given access to the building and will remain part of the Fenner community."
The spokesman apologised for the inconvenience and thanked the students for their patience and understanding.
Fenner Hall was moved from Northbourne Avenue to the centre of the university's campus at the start of the year as part of a large-scale campus redevelopment.
The former Fenner Hall building was been re-opened to postgraduate students as Gowrie Hall, years after the university had suggested it was no longer suitable to house students.