Water authorities are warning if heavy rain was to fall major water catchments, including the Hume Dam, could be contaminated.
The Murray-Darling Basin Authority said the bushfires burning in the Upper Murray will impact water quality "when the rain finally comes".
In the latest drought update, the MDBA river operations executive director Andrew Reynolds said fires haven't impacted river operations just yet.
"However water quality is likely to be impacted when it rains - what we are facing is a double-edged sword," he said.
"When we receive the much-needed rain to replenish depleted storages, we expect ash and sediment from the fires to be washed into some of our streams, rivers and dams.
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"At this stage we know the fires will have an impact on water in the Upper Murray catchment above Hume Dam, but we will be able to make a full assessment when it's safe for agencies to enter these areas."
The dam is sitting at only 21.47 per cent and Mr Reynolds acknowledged this is "the last thing" fire and drought affected communities need.
"But we will work closely with relevant agencies to manage the impacts and bring information to communities as they need it," he said.
Meanwhile the ongoing dry, hot and windy conditions has seen water quality across both states deteriorate and an increase in blue-green algae has been detected.