It is the latest in a series of spills involving Petrobras, which has been fined tens of millions of dollars by the environmental authorities so far this year.
Officials says they have contained the spill of MTBE and are making plans to remove and treat all the contaminated soil nearby.
They were alerted after residents in the town of Paracambi began complaining of nausea and a strong chemical smell.
It is the latest in a series of spills involving Petrobras, which has been fined tens of millions of dollars by the environmental authorities so far this year.
Petrobras says it immediately shut down the pipeline after it received complaints on Saturday.
The company has discovered a small hole in the pipe but insist that there is only a "minimum chance" of the leak contaminating ground water.
Rio de Janeiro's state environmental secretariat says it will fine Petrobras up to $560,000 depending on the extent of the damage.
MTBE is a toxic substance often added to gasoline to boost combustion rates. It is known to cause cancer in animals.
Maximum fine
Just two weeks ago an underwater pipeline at a Petrobras refinery split, oozing four million litres (one million gallons) of crude oil into the southern Iguacu river - Brazil's biggest spill in 25 years.
And in January a Petrobras tanker leaked 1.3 million litres of oil close to Guanabara Bay.
Brazilian authorities imposed a $28m fine on the state oil company - the maximum allowed.
Marine life has been severely affected by the successive slicks and environmentalists say it will take 10 years for the region to recover from the accidents.