The Department of Conservation warning follows severe weather warnings issued by the MetService at the weekend.
A 2km-long dam formed by a landslip in the Young Valley in September 2007 could, when full, contain at least 17 million cu m of water.
An interagency management plan has been put in place to deal with issues that could threaten the stability of the landslip dam.
Under a large dam break, the present flood channels would not be able to contain the flow of water and people in the valley could be be harmed.
Trampers were being advised to keep out of the valley at the weekend, with warnings placed at Doc visitor centres and at track entrances.
The Otago Regional Council water information website shows the landslip dam's contents had risen from 579.2m above sea level on Friday to 581.2m by 4pm yesterday.
There had been 33mm of rain at Makarora since 4pm Saturday and it was still raining last night.
Wanaka Doc area manager Paul Hellebrekers said last night the situation would be reviewed first thing this morning, depending on the weather overnight and the rainfall that had been received.
The MetService website forecast prepared by John Crouch yesterday said several frontal bands, embedded within a strong moist north to northwesterly flow, were expected to bring periods of heavy rain to Westland and Fiordland through to at least tomorrow, with significant spillover into the headwaters of Otago and Canterbury lakes and rivers.
Up to 90mm was likely to spill over the main divide into the headwaters, with most of this rain occurring yesterday and today.
"This is a significant amount of rain for these areas, and will bring rapidly rising river and stream levels in Westland and Fiordland, and also to the rivers of Canterbury and Otago that feed from the Southern Alps.
"People within these areas, especially hunters and trampers in the mountains, and river-users elsewhere, are advised to take care over the next few days," the MetService said.
