More than 150 properties have been affected as knee-high water flooded the Northwold Road junction.
This is the third burst water pipe to cause flooding problems in the capital in a week.
Eyewitnesses said the water main had been leaking on to Stoke Newington High Street since Monday.
Gonen Ozer, who manages two businesses on Stoke Newington High Street told the BBC he was considering legal action against Thames Water due to loss of business.
Thames Water said the flooding was caused when a 30-inch water pipe burst.
Thames Water director Bob Collington said: “It has been an extremely difficult week, and I do understand just how devastating it must be for those customers who have suffered flooding so close to Christmas.
“We are doing everything we can to help them and will make sure they are not left out of pocket for what has happened.”
Crews are attempting to divert water away from homes and businesses.
The Metropolitan Police has closed roads in the area and advised pedestrians and motorists seek alternative routes.
The burst follows a severe flood causing millions of pounds of damage in Islington last week.
Separately, another burst water main led to flooding in Blackheath on Saturday.
Six fire engines, two fire rescue units and over 40 firefighters dealt with a 12-inch burst water main on Lee High Road.
Thames Water said Saturday’s flood in Blackheath was caused by a contractor.