The computer systems of the Overijssel municipality of Hof van Twente have been "made inaccessible" by unauthorized persons.
Due to disruption, citizens cannot handle a number of matters digitally, including applying for a passport or driver's license or reporting a move.
The municipality will report this on Thursday.
Making the systems "inaccessible" may indicate ransomware.
When asked whether this is actually the case, a spokesperson refers to the police on behalf of the municipality.
He does not want to answer that question.
Ransomware, also known as ransomware, encrypts servers and makes files inaccessible.
The hostage taker often demands a ransom to release the files.
In some cases, data is stolen to blackmail the victim.
The outage was discovered on Tuesday morning when employees could not log in.
"It became clear that there are unknown third parties who have gained access to our systems and have made the data on all our servers inaccessible to us," the municipality said through the mayor.
Sensitive resident information on affected servers
Hof van Twente announced that the affected servers contained sensitive information about residents.
There are no indications that these have been viewed, but the municipality admits that it cannot provide 100 percent certainty.
"However, much of this data can be considered unusable. It has been destroyed, cannot be retrieved," the municipality reports.
"This means that our municipality now faces the immense task of building an entirely new infrastructure for our data and adding new 'clean' data to it."
The exact extent of the damage is currently being investigated, the spokesman said.