Large severe floods within the municipality generally occur as a result of a moist warm airflow from northern Australia bringing moderate to heavy rainfall over a period of 12 or more hours following a prolonged period of general rainfall. The general rainfall 'wets up' the catchments and partially fills both the on-stream dams and the natural flood plain storage.

These combine to increase run-off generated during the subsequent period of heavy rainfall.

Riverine flooding of the Diamond Creek, Plenty River, Wilsons Creek, and Yarra River have historically caused issues for the shire.