HIGH levels of potentially toxic blue-green algae have been detected in Hepburn's Lagoon, north of the Newlyn Reservoir.
Blue-green algae can be dangerous to the humans and animals and Goulburn-Murray Water has advised the public to avoid bodily contact with the water.
Loddon Headworks manager Ivan Smith said warning signs have been put in place.
"Characteristic signs of algae contact are skin rashes or itchiness; sore eyes, ears and nose; or, if swallowed, gastroenteritis, nausea or vomiting," Mr Smith said.
"People with sensitive skin or allergies are at a higher risk."
Blue-green algae has also been detected at Tullaroop Reservoir, 16km north-east of Talbot.
Goulburn-Murray Water has advised water users at Tullaroop Reservoir, Tullaroop Creek and Hepburn Lagoon to seek an alternative water supply for both stock watering and domestic use.
Blue-green algae can be invisible to the naked eye however there may be a scum or slick on the water surface.
Musty or earthy odours may also be present. In windy conditions, scums can accumulate in backwaters or protected areas.
Goulburn-Murray Water will monitor the situation closely and advise the public and water users of any changes in the blue-green algae alert status.