A error by contractors has led to wastewater entering Lake Taupō, with tests due this morning about the extent of the pollution.
An unknown quantity of wastewater entered the lake at the stormwater outlet off Wily Terrace in Acacia Bay, after contractors failed to restart a pump following routine checks on Monday.
Signage has been put up to warn people not to swim at the popular tourist spot until sample tests show the water is safe.
Taupō District Council chief executive Gareth Green said the council was incredibly upset that human error has caused an environmental issue.
"We acknowledge that human error does happen from time-to-time however, as the lake's water quality is one of the most important parts of our business, we will be doing what we can to make sure it doesn't happen again."
He said a debrief would be held with contractors to ensure appropriate measures were put in place to stop this happening again.
Popular swimming spots around the lake including Kinloch and Acacia Bay and the main town lake front have been closed at points over the summer due to algal blooms.
The swim leg of an Ironman event to be held on the lake late last year was also cancelled because of heath fears associated with the blooms.