All outpatient appointments have been cancelled, Portsmouth Hospitals University NHS Trust announced.
However dialysis and chemotherapy appointments will continue as usual.
Firefighters from Cosham fire station are at the scene and the leak is said to have spread across large parts of the site.
A statement from the hospital said: “As a result of a significant water leak affecting large parts of the Queen Alexandra Hospital site, we have declared a major incident.
“All outpatient appointments scheduled for this morning have been cancelled.
“We apologise for the short notice and any inconvenience this will cause.
“We will rearrange appointments as soon as possible.
“Dialysis and chemotherapy appointments will continue as usual.
“We will keep you updated with any developments and potential impact on other services.’
Penny Emerit, chief executive, at Portsmouth Hospitals University NHS Trust, said: “We are continuing to run a major incident from the Queen Alexandra Hospital site following a significant water leak early this morning. Work has been ongoing to identify the source of the leak and we are now testing the water supply to ensure that the water supply is resilient across the site. Our priority is to ensure that we can safely care for our patients currently with us and reduce the number of people onsite.
“We have taken the decision to cancel all of today’s remaining outpatients and elective procedures. However, maternity appointments will go ahead and some outpatients clinics are contacting patients directly if their appointment can go ahead. We are also running lifesaving surgery, renal dialysis, chemotherapy and radiotherapy. Our Emergency department remains open for the most serious life-threatening emergencies, but please use alternative services where possible.