"We don't think there's any kind of threat at this time and we're in the process of issuing an all-clear," City Manager Trey Cocking told reporters.
Authorities haven't released details about what kind of chemical leaked, but they've said residents who'd been advised to take shelter inside can now leave their homes.
The spill occurred during a delivery at a plant just after 8 a.m. (9 a.m. ET), when two chemicals were inadvertently mixed together, sending a gaseous plume into the air, Cocking said.
Images from CNN affiliate KSHB
after the spill showed a thick gray plume clouding the air.
The city manager said 18 people have been treated for respiratory discomfort.
"I'm being told that those injures are minor," he said. "At this point and time, those people are being kept for observation."
Warnings to stay away
Atchison is located in northeast Kansas, about 20 miles from Leavenworth and 40 miles from Kansas City.
The spill occurred near a sewage plant operated by MGP Ingredients, officials said. Headquartered in Atchison, MGP
produces distilled spirits and specialty wheat proteins and starches.
CNN has contacted officials at MGP via email and phone for comment but hasn't received a response.
As the plume spread, emergency officials told residents to seek shelter and stay inside. Authorities closed some roads and evacuated schools.
"If you are not in Atchison, please stay out of town," Atchison County Emergency Management said on Facebook.
Corie Dunn, who lives just outside Atchison and used a drone to photograph the spill, said the town was "in total chaos" as the cloud spread.
"It's not that bad here, but in town it smelled like bleach," he said.
Students and faculty from Benedictine College evacuated when officials got word of the leak, spokesman Steve Johnson told CNN.
"We used our athletic buses and people carpooled in their personal vehicles," Johnson said, estimating that a couple thousand people were among those who had evacuated to a state park northwest of the city.
So far, Johnson said, no students have reported feeling sick as a result of the leak.
Alec Convery said he was in drawing class at the school when teachers told them to evacuate. He drove with his brother and a friend to St. Joseph, Missouri, about 20 miles away.
"On the way out, we could see a huge cloud of what looked like fog. ... At first, I was very scared and didn't know what to do, but now I am more relaxed," he said.