Information provided by Goulburn-Murray Water indicates the lagoon, which is located at the north of the Newlyn Reservoir, is empty.

The lagoon has been empty, or very close to it, in 1967, 1968 and 1983. At full supply level, the lagoon holds 3000ml.

Hepburn's Lagoon is used to supply water for irrigation, stock and domestic and urban customers.

About this time last year, high levels of potentially toxic blue-green algae were detected.

While the water supply level is empty, Goulburn-Murray Water is working with the North Central Catchment Management Authority, the Environment Protection Authority and local landholders to reduce nutrient inputs and

blue-green algae blooms.

Goulburn-Murray Water chief executive officer Russell Cooper said the low level of storage was not helping the reduction incidence of blue-green algae.

"Blue-green algae reduction would be achieved only if the storage was to dry up completely," he said.

"It is unlikely that this extent of drying has occurred."

Mr Cooper said other work at Hepburn's Lagoon would address a long standing erosion process occurring along the southern foreshore of the lagoon.