WaterNSW has issued a red alert level warning for blue-green algae in the water storage at Copeton Dam.
Downstream of the storage, the Gwydir River, has been placed on a green alert.
People have been advised not to undertake recreational activities where they may come into direct contact with the water in a statement.
Nor should residents use the water for domestic tasks such as showering or washing.
Contact with the water may also pose a threat to livestock and pets. The species of blue-green algae identified are potentially toxic and may cause gastroenteritis in humans if consumed and skin and eye irritations after contact.
Boiling the water does not remove algal toxins. Town water supplies remain unaffected and safe to drink.
Livestock owners are reminded to continue to check stock water supplies for blue-green algae and to remove stock from foreshores where surface scum is visible or blue-green algae are suspected.
Blue-green algae usually appear as green paint-like scums on the water, near the edges, or as greenish clumps throughout the water.
It makes the water appear dirty, green or discoloured and generally has a strong musty or earthy odour.
Any fish caught should be cleaned and washed thoroughly in uncontaminated water and any internal organs disposed of before consumption.
Blue-green algae occur naturally and can reproduce quickly in favourable conditions where there is still or slow-flowing water, abundant sunlight and sufficient levels of nutrients.
It is not possible to predict how long the algae will remain at high levels.
Regular monitoring will continue and the alert will be lifted as soon as the high levels of algae dissipate. People who believe they may have been affected by blue-green algae are advised to seek medical advice.
Updates about blue-green algae blooms and red level warning areas can be obtained by calling 1800 999 457 or visiting //www.waternsw.com.au/water-quality/algae