HIGH levels of potentially toxic blue-green algae have been detected at Lake Tom Thumb and Kennington Reservoir.
Residents are advised to avoid contact with water at both these locations, after a lack of inflow and ongoing warm temperatures created ideal conditions for the algal blooms.
Dogs and other domestic animals should also be stopped from entering the water.
City of Greater Bendigo environmental health manager said the council would continue to monitor the situation closely.
She said boating, fishing, sightseeing and other activities that did not involve direct water contact could still be enjoyed.
"Blue-green algae are very small and can be present in water where there are no obvious signs of a problem," she said.
It was unknown how long blue-green algae will remain at high levels within the lake or reservoir.
Blue-green algae has also been detected at Castlemaine Botanical Gardens.
Characteristic signs of algae contact are skin rashes or itchiness; sore eyes, ears and nose or, if swallowed, nausea and vomiting.
People who come into contact with affected water should wash affected skin immediately in clean water.