Bondi Beach has reopened after the algae that turned the water red faded and disappeared from sight, leaving only a few traces in the sand.
While the red algae, known as Noctiluca scintillans or sea sparkle, has no toxic effects, people are still advised to avoid swimming in areas with discoloured water because the algae, which can be high in ammonia, can cause skin irritation.
Sea sparkle, which resembles fairy floss, gets its name because it may appear to be phosphorescent at night.
The Metropolitan Sydney South Coast and Hunter Regional Algal Co-ordinating Committees (RACCs) attributed the algal bloom to an "upwelling of nutrient rich deep ocean water onto the continental shelf"', which was often seen after rainfall near river mouths.
Earlier today experts thought the algae could have been a type of blue-green algae which often turns brown, red or pink because of photosynthetic pigment. But that was ruled out.
While final test results will not be available for some time, preliminary tests also ruled out contamination from the sewage treatment plants at Bondi and Malabar.
Bruce Hopkins, the lifeguard co-ordinator for Waverley Council, said Bondi Beach was closed early this morning after lifeguards arrived at 6am.
As lifeguards prepared the beach for the public, they saw algal bloom "out the back" that began to drift towards the beach.
"We decided to close the beach and warn the public," said Mr Hopkins. He said the bloom was very obvious and has "a real fishy smell".
"If you can't see it, you can definitely smell it," he said.
Mr Hopkins said he had been working for 21 years as a lifeguard and during that time he had seen all sorts of algae, including red and blue.
While some algae was also spotted off the shore of neighbouring beaches at Tamarama and Bronte, they remained open. Clovelly Beach remains closed.
Earlier, a volunteer at the Surf Lifesaving club in Bondi said that the bloom was washing up on shore: "It's staining the sand as well."
Fairfax Media photographer Edwina Pickles said the bloom had not stopped some people from playing or swimming at Bondi.
She spotted four swimmers and six surfers and a handful of children building a sandcastle near the water's edge.
"There are also a whole lot of tourists taking photos of the algae," she said.