Restoration crews are on site, but it is not yet clear how long it will be before parts of the hospital can reopen.
The incident began when construction crews damaged a water main with an excavator around 9 a.m. PT Monday.
Water from the pipe burst through a wall in the hospital emergency room, flooding parts of the first floor with ankle-deep murky brown water. Officials say the water is dirty, but not contaminated.
"The water feed has been shut down and assessed by our chief medical health officer. The water is not a public health hazard and does not require decontamination," said a statement issued by the Fraser Health Authority.
Hospital officials have confirmed the ER has been evacuated and 25 patients have been moved to other areas of the building.
The diagnostics area on the first floor has also been closed, but the rest of the hospital remains open, according to officials.
"Surrey Memorial Hospital remains open but the emergency department is closed at least until tomorrow as we assess the damage," said the statement.
"Please avoid coming to Surrey Memorial Hospital unless necessary. Visitors that do arrive will be directed to the first floor physiotherapy area."
Incoming emergency patients are being directed to a makeshift facility that has been set up at the nearby Jimmy Pattison Outpatient Care and Surgery Centre on 140 Street near the Fraser Highway.
The news comes as heavy rain continues to soak much of B.C., but it does not appear that the hospital flooding is related to the weather.