Heavy rain has caused College Lake Dam, around a mile from the city, to fill to near capacity.
Over 100 people are being forced from their homes in Lynchburg as crews monitor a dam in danger of failing.
Lynchburg Director of Water Resources Tim Mitchell said at a 3 p.m. news conference that the dam would continue to be watched around the clock. It said up to 46 centimetres of lake water overflowed onto a road and into a nearby creek.
Local fire and police were sending boats to rescue people to area shelters.
Lynchburg has a population of about 80,000 and lies in the Blue Ridge Mountains.
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City officials posted pictures Thursday of rescuers using a raft to take families from a flood-threatened apartment complex as well as the partial collapse of one road into an adjacent creek. The dam has been under survey by the city for years as a safety hazard.
Heavy rains and flash floods have struck a wide swath of the country from the Carolinas to New England.
A flash-flood watch was in effect through late Friday morning in Lynchburg, with 1 to 3 more inches of rain expected.
College Lake is a manmade lake, built in the early 1930s by the Virginia Department of Highways as part of the development of U.S. Highway 460, west of Lynchburg.
Almost a hundred people have been evacuated from their homes in Lynchburg, Va., after an intense storm amid concerns that an aging dam might fail and unleash risky floodwaters. It is located in a critical position, according to the university, for capturing surface waters from multiple sources of the Blackwater Creek watershed just before emptying into the James River.
The National Weather Service says up to 6 inches of rain fell within hours, filling College Lake near Lynchburg, Virginia beyond capacity.