People in Nelson are being advised not to swim or let their dogs drink from parts of the Maitai River.
The warning comes after high levels of the toxic cyanobacteria - commonly called blue-green algae - were detected. It can potentially be lethal to dogs and make people sick.
Areas affected are in the lower Maitai River from Maitai Camp downstream and the problem is likely to persist over summer.
Signs warning people to stay away from the water are being erected at the main entry points to the lower Maitai recreation areas.
Nelson's medical officer of health Dr Ed Kiddle says people have to assume that if they can see the cyanobacteria - which are often green/brown or black in colour - then the toxins may be present.
Scientists from the Cawthron Institute are investigating.