HSC students sitting their business studies exam were among almost 800 pupils evacuated Thursday when a gas leak forced the closure of a South Coast school.

The 16 Ulladulla High School students were only 30 minutes into their exam when they were evacuated from the school hall after a leak from gas bottle was found under their building. 

Students from other years were also evacuated and it is understood the school will remain closed for several hours. 

Ulladulla High School principal Denise Lofts said all students were "safe and well" and under the supervision of teachers at the Ulladulla Civic Centre.

"Police and Fire Brigade are at the school monitoring the situation and coordinating a resolution of the gas leak," she said.

"At this stage it does not appear that the school will reopen for a couple of hours and we would encourage parents and carers to sign out their children for the day."

A spokesman for the Board of Studies said the school would need to lodge an illness or misadventure form on behalf of the students who were sitting the exam.

"The safety of students is our first priority," the spokesman said.

"We will look at the part of the exams that they did do in the half an hour and look at their school assessment mark and determine a mark that would reflect what they would have expected to achieve in an exams."

The spokesman said the students could not re-sit the exam because they had already seen the paper but they would not be disadvantaged. 

"If an illness or misadventure application is upheld, the Board of Studies will consider other indicators of the students' performance, such as school assessment marks, to ensure that the students are not disadvantaged by this occurrence," he said. 

"All students who presented for the business studies examination will be awarded a fair and consistent result for the course."

More than 16,200 students are sitting the business studies exam this year.