Contaminated soil underneath Beach Road extension in Tisbury is so widespread that the entire area — including the beachfront lining Vineyard Haven harbor — is under investigation by the state Department of Environmental Protection (DEP).

DEP investigators were in Tisbury this week to examine soil along the Beach Road extension, where contractors hired by the Massachusetts Highway Department to lay drainage pipe instead found soil polluted with gasoline and oil.

The discovery abruptly stopped the digging, and has cast doubt over the future of the project, designed to stop flooding around the busy Five Corners intersection.

Reliable sources told the Gazette that the soil below Beach Road extension is “completely saturated” with oil and gas. In fact, they said the soil is so contaminated that some workers refused to step into a recently dug hole because they were unable to breathe.

Another ominous development occurred this week when investigators, digging on the beach next to the Black Dog and Coastwise Packet, found the sand underneath thick with oil and gas — just feet from Vineyard Haven harbor.

DEP is heading the investigation to determine the origin of the contamination and charge the responsible parties with the cleanup.

Tisbury officials right now are saying little about the mess, but are hoping for a prompt resolution of the matter.

“DEP and state highway department officials are in town assessing the situation and we are anticipating a meeting with them to discuss their cleanup plans,” said Tisbury executive secretary Peter L. Fohlin.

While officials are not confirming the origin of the contamination, it is suspected the oil and gas stems from old Dukes County Garage, which operated from the 1920s to late 1960s, and at one time featured gas tanks and a repair shop.

The garage — which was sited at the head of Beach Road extension — is assumed to be the culprit.

“We don’t know the specific origin, but it’s widely known that the area was used for automobile repair and services for many years,” Mr. Fohlin said.

It appears Tisbury may be off the hook for paying the cleanup bill. Since the state highway department was contracting the drainage pipe dig, it is assumed the state must pick up the tab.

“We’re still talking with the appropriate agencies about seeing what needs to be done in the area,” highway department spokesperson Krissa Myers said this week. “Our people have basically stepped aside so DEP can do their job.”

But even if the state pays the entire bill for the Five Corners cleanup, the contamination has already proved costly to Tisbury. The discovery halted the much anticipated drainage pipe project, which includes Water street and is intended to stop the usual flooding in the downtown area.

Town public works director Fred LaPiana said he wants to complete the Beach Road extension portion of the project soon, but characterized the drainage work on the abutting Water street as successful.

“I’m very pleased at what has been done so far on this project,” Mr. LaPiana said. “The installation of the pipe on Water street has paid tremendous dividends so far....The overflow pipe on Water street worked like a charm.”

Mr. LaPiana said he may get an answer on the length of the project delay and cleanup possibly as early as next week.

In addition to the department of public works, the Tisbury Board of Health has also been monitoring the investigation of Beach Road extension.

Capt. Robert S. Douglas, owner of the Black Dog Tavern Inc. and the adjoining Coastwise Packet Co. on Beach Road extension, said he has been opposed to the Beach Road project from the beginning.

Mr. Douglas said he does not understand why the state opted to do an extensive, $360,000 underground piping project instead of dredging the harbor and the clearing out the existing drainage pipe.

“For pennies, they could do some maintenance dredging,” Mr. Douglas said.

But now, the state is faced with an expensive cleanup project that could end up costing Massachusetts taxpayers far more than its original $360,000 price tag, he said.

“I don’t know what they do now,” Mr. Douglas said.

Gazette staff reporter Mark Alan Lovewell contributed to this story.