A leaking radiator on the fourth floor caused dirty water to pour from a councillor's office down into the basement.
Some rooms were left in about two inches of water and the famous Satinwood Suite – which is lined with the now extinct exotic satinwood imported from Queensland, Australia – could be closed for up to six weeks.
Various events scheduled in the building for the next few weeks, including a Scottish Women In Business conference and a Strathclyde Police Authority meeting, will have to be relocated.
Council workmen and specialist restoration workers were today continuing a massive clean-up .
The damage was discovered by security staff who found the water running down the 125-year-old building's internal walls at about 2.30am yesterday.
Some of the original wallpaper in the Satinwood Suite is now stained and, in places, the water has got behind it and loosened it, while features around the room have been left warped.
The wool carpet had to be ripped out because of water damage. It will cost thousands of pounds to replace.
Paintings hanging in the room, which belong to the city's art collection, were not damaged.
A councillor's office, auditor's office and customer care room have also been ruined by the flooding.
The damage is being assessed by specialist restoration workers.
Keith Dalkin, manager of the City Chambers, said it was too early to say how much it would cost to repair the damage, but it was expected to exceed thousands of pounds.
He said: "It will take between five and six weeks for the walls and floors to dry out. Because of the age of the building we have to let it dry very slowly.
"If we were to try and hurry the drying process, the wood, particularly in the Satinwood Suite, could end up warped or cracked.
"We also have to be very careful with the decorated ceiling in the Satinwood Suite.
"The wool carpet has been taken out and we hope it can be saved. But, because it is wool and because of its age, we fear the carpet will shrink and need to be replaced."
The City Chambers, designed by Glasgow-based architect William Young, took six years to build and was opened in 1888 by Queen Victoria.
Its Satinwood Suite, which faces George Square, is one of the most impressive rooms.
There are many detailed carvings around the walls and the room is dominated by an alabaster fireplace.
Recently opened as a wedding venue, the Suite is usually used for civic receptions.
Mr Dalkin added: "Rescheduling meetings and conferences is obviously an inconvenience, but we have to take our time and let the building dry out.
"This is a building of historical significance and it is vital we keep any damage as minimal as possible."