A Red Alert was issued after the toxic bloom was identified on Friday.

It means people should not undertake recreational activities where they may be coming into direct contact with the water, such as swimming.

People are also advised not to enter the water, not to drink untreated water or bathe in water drawn from the dam.

Authorities say the species of blue-green algae identified is potentially toxic and may cause gastroenteritis and other health issues in humans if consumed.

Boiling the water will not remove algal toxins, but we're being told town water supplies remain safe.

Property owners are being urged to remove stock from the dam's foreshore.

The Peel River downstream of the storage is on a Green Alert, but we're being warned conditions can change quickly.

Stock and domestic users downstream of the storage and users of the Dungowan Pipeline should monitor water supplies for algae scums and use alternate water supplies if an unusual concentration of algae is 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.

Authorities say they can't determine how long the algae will remain at high levels, but they will be monitoring the outbreak and the alert will be lifted as soon as the high levels of algae dissipate.

If you have come into contact the the water, and believe you may have been affected by blue-green algae, you are urged to seek medical advice.