City workers replaced the old street sign Friday after it had come loose, resident Deborah Bowler said she observed.
She soon realized the street had a new, more racy name.
"At first I thought, it's only been up for a day and someone has messed with it already. But on closer inspection I realised that's the real deal," she said.
Council spokesman Richard MacLean said the previous street sign was often vandalized to say "Topless Terrace" by people "with a ladder and a bit of white tape or paint."
This time it appears to be a spellcheck mistake, Wellington's The Dominion Post reported Sunday.
"The council's usually managed to avoid the temptation. Now we are abreast of the situation we'll do a bit of an investigation and get things fixed to protect the honor of the good people of the lane," MacLean said. "We don't want it turning into a tourist attraction or to be overrun by tittering schoolboys."