A Department of Conservation media statement said it was unclear if the reduced water level was due to a fault with the Otago Regional Council monitoring equipment or if the dam was unstable because of the recent rain event.
However, a positive sign was the waters in the Makarora River were running clear.
Doc issued a high alert warning for the valley until the situation could be investigated.
Trampers were being advised if they intended to use the area not to camp on the valley floor and move through the Young Valley as quickly as possible.
The department is placing ''high alert'' warning signs in nearby visitor centres and at relevant track entrances.
The Wanaka Doc office plans to review the situation this morning and, depending on the results of the investigation, a code red status might be activated to close access to the area according to the Young Valley management response plan, or the alert would be withdrawn.
