It is believed that a 30-tonne tank in Coalisland containing liquid petroleum gas ruptured in the hot weather on Monday.
About 200 homes in the Annaghmore Road area of the town were evacuated on Monday night following the leak.
Rain and fog in the Annaghmore area helped dissipate a gas cloud which had formed on Tuesday morning, while senior fire officers said they had managed to stem the source of the leak.
Walter Johnston, the assistant area commander, said: "It was a 30 to 40ft by 10ft bulk container with a gas leak at one end but that gas leak has been stopped.
"But at the present time all we're waiting for is the gas engineers in Belfast to come down with a cap and a lever attached to empty out all the remaining gas."
People returned to their homes on Tuesday afternoon.
The health and safety executive is to hold an investigation into the leak, which is expected to last several weeks.
A police spokesman said emergency services, the local authority and the Health and Safety Executive had been working through Monday night to stop the leak and make the area safe.
Acting chief fire officer Colin Lammey had been at the scene throughout the night.
Speaking earlier on Tuesday, he said: "This is a very serious incident for the fire service and for the local community.
"There is a hole in the side of this gas storage tank."
Residents
Several hundred people had to leave their homes.
Earlier on Tuesday, Sinn Fein MLA Francie Molloy said about 10 fire engines were at the scene of the gas leak.
Mr Molloy said he had been talking to residents in the Moorlands area, who had been told to evacuate.
"They're telling me that there is a strong smell of gas in the area and that people are concerned that there may be an explosion," he added.
SDLP Assembly member for Mid Ulster, Denis Haughey, said the safety of people living in Coalisland must be the top priority.
"This is a dangerous incident. With a pall of gas over the town, the immediate priority is to ensure public safety.
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