A big 30 feet wide breach appeared in the Korai Wah canal near Panu Aqil on Friday night. Water flooded Panu Aqil city and reached the National Highway.
At least 10 villages inundated, crops were affected, and villagers migrated to safer places in boats.
A Pakistan Army rescue team filled the cracks with sand.
Affected villagers alleged that officials of the irrigation department had sold sand from the bank of the dam causing its walls to weaken.
They said that they had written letters to the National Accountability Bureau and Federal Investigation Agency against the officials.
Officials say the canal has been closed from its source at the Guddu Barrage and the repair work of the breach will be completed as the water flow goes down in the canal.