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The council has been summonsed to appear in the Queenstown District Court next month, to face a charge laid under the Resource Management Act 1991.
In a statement, council communications and engagement manager Naell Crosby-Roe said the charge was brought by the Otago Regional Council.
It related to an alleged incident on February 20 and 21 this year on land near the Kawarau River following an "overflow from the wastewater system", he said.
"QLDC’s contractors attended to the discharge once notified of it by the harbourmaster and informed the regional council," Mr Crosby-Roe said.
"QLDC has co-operated with the regional council throughout its investigation and anticipated some form of enforcement action being undertaken."
The council faces a charge of discharging contaminants (wastewater) on to land which could have resulted in those contaminants entering the water.
The council is scheduled to make its first appearance on September 18.
"As the matter is now before the court, Queenstown Lakes District Council will make no further media comment pertaining to this matter," Mr Crosby-Roe said.
In the case of a conviction the maximum penalty was a fine of $600,000.