Tests from the lake have confirmed the presence of potentially toxic blue-green algae at “red alert levels” in the Mitta arm of the dam.

NSW Office of Water spokeswoman Natasha Ryan said at that level people should avoid all contact with the affected water.

“Red level warning indicates that waters are unsuitable for recreational use or primary contact by domestic users and may also pose a threat to livestock,” she said.

“Residents are advised to avoid contact with the raw water supply.”

Ms Ryan said it was the first red alert in the Murray region this year, but it was not unexpected given the recent warm and still conditions.

She said Albury Council had been informed and was treating the town water supply with activated carbon, with North East Water also treating water supplies for Tallangatta, Bellbridge and Wodonga as a precaution.

But Ms Ryan said there would be no impact on drinking water supplies to residents who are connected to the town water supplies.

People are being warned to avoid any water that appears bright green, where obvious green scums are present or where there is a distinctive odour.

Ms Ryan also advised people not to drink untreated water.

Livestock owners are urged to check stock water supplies for blue-green algae.