The council said results from the weekly samples taken at the lagoon showed high levels of potentially toxic cyanobacteria (blue-green algae) and people should keep themselves and their pets out of the water.
Cyanobacteria can produce toxins which may cause serious illness in people and animals.
Council lakes scientist Hugo Borges said it was not uncommon for potentially toxic algae to bloom in the upper lagoon during summer and it was not possible to predict how long it would take the algae to recede.
"The most important thing is to keep out of the water until the warning is removed," he said.
The regional council installed warning signs at the entrance to the upper lagoon and at the creek that enters Tomahawk Beach as a precaution in the event the wind sweeps the algae
down.
All warning signs will remain in place until monitoring shows the algal bloom has reduced and weekly samples are consistently below levels posing any threat to health.
