The bridge, on which about 31,400 cars travel each day, was closed as a precaution until the Seattle Department of Transportation could determine if its structural integrity was threatened.
"We have discovered some undermining of the soil," said Gregg Hirakawa, spokesman for the Seattle Department of Transportation. He did not have an estimate of when the bridge would reopen to cars.
Two unoccupied cars that had been parked under the bridge on Portage Bay Place fell into the hole when the road was undermined by rushing water, Seattle Police spokesman Sean Whitcomb said.
No injuries were reported, he said.
The bridge southwest of the University of Washington opened to marine traffic around 10:30 a.m. The pipe stopped spewing water at about 10:15 a.m.
Residents of the houseboats will have to walk down stairs to access their homes until Portage Bay Place can be repaired, Hirakawa said. Police and fire officials began immediately to work on alternative ways to reach the homes in case of emergencies.
Seattle is in the process of renovating all its old bridges, and transportation officials completed some patching work on the University Bridge this past spring, Hirakawa said. Concrete that had fallen off the reinforced steel structure was replaced, but it was not a structural problem, Hirakawa said.
This was the second major water main break in Seattle in a week.
A 20-inch water main sprouted like a geyser and flooded several streets and businesses in the city's South Lake Union neighborhood on April 25.
"This was a very different situation than last week's break," said Mayor Greg Nickels, who was at the scene early Wednesday.
He said Wednesday's break involved a 24-inch cast iron pipe, noting that it was not due to construction like the break last week closer to downtown Seattle.
Andy Ryan, spokesman for Seattle Public Utilities, said the water flowing out of the pipe was shut down slowly Wednesday to avoid problems with the system. The utility believes there was a horizontal break in the pipe, which had its last leak 15 years ago.
The pipe that broke Wednesday dates back to 1912 and is about 10 feet long, said Joe Mickelson, water operations director for Seattle Public Utilities.
"We have a lot of old pipe in the ground and it's in really good shape," said Mickelson, who was on the crew that fixed this pipe 15 years ago and said Wednesday's problem was unrelated to the past repair. "That pipe is probably an inch thick. New pipe is usually half an inch thick, so it's really good pipe."