At least 590 households north and south of the River Steeping in the town of Wainfleet All Saints have been told to evacuate.
The Maritime and Coastguard Agency are assisting with the evacuations.
Military helicopters were deployed to the area on Saturday, after the river burst its banks at Thorpe St Peter.
Temporary repairs on the river have started to deteriorate, officials have said.
A Sky News crew on the ground was told there is a problem with the original breech, which is now slowly seeping, and there is another crack that has appeared further down the bank.
Local MP Matt Warman said Wainfleet was “by no means out of the woods yet” when it comes to floodwaters.
He said: “The Environment Agency is in the process of putting together two pumps that will start taking away some quantities of water”, but he was unsure when they would be up and running.
He also suggested the Environment Agency and other authorities may need to consider in future what could have been done better to prevent the deluge, but “ultimately, that level of water was always going to cause problems”.
A Chinook helicopter was deployed to drop sand in Wainfleet All Saints on Friday to try and stop the flow of water from the River Steeping and a Puma was also being used.
Officials say the next 24 to 48 hours will be crucial, depending on the amount of rainfall, as they wait for the waters to subside.
As of 12 June, Britain saw rainfall of 2.6 inches (6cm) since the beginning of the month, but that is not a record amount for June.
The Met Office says June 2012 remained the wettest ever with 5.9 inches (15cm).
Met Office meteorologist Simon Partridge says across the country temperatures will rise into the mid-20s early next week, before there is further rain and the risk of thunder.
“There is the potential for some thundery and heavy rain on Tuesday and Wednesday,” he said.
“A little bit of uncertainty about when it will arrive but it will be pushing in from the south and will leave from north-east England. England and Wales will have spells of heavy and thundery rain.”
On Friday, a landslip near Corby, Northamptonshire, stopped an East Midlands Train from London to Nottingham – and then a second train that came to help also became stuck.
Around 400 passengers were stranded for up to eight hours before being evacuated and one person was treated at the scene in an ambulance by paramedics.
The train operator apologised to customers involved, calling it a “challenging situation” due to rubble and serious flooding hampering rescue efforts.
It also said it was “working hard” to reunite people with their luggage, which it said was being held safely in Kettering.