Environment Canterbury (ECan) is investigating claims that drums of a toxic chemical used to make agent orange are buried under a dam lake near the town of Fairlie.
The investigation comes after a man who worked on the Opuha Dam's construction in 1994 told ECan drums containing the chemical 245T were buried at four sites during its construction, The Press reported.
245T is a dioxin-contaminated herbicide used to make Agent Orange.
ECan environmental protection manager Brett Aldridge said the claims were being taken "very seriously" and geophysical equipment would be used to locate any metal drums which were be buried.
The worker had shown ECan where he believed the drums were buried and signed an affidavit over his claims.
Opuha Dam chief executive Tony McCormick said burying chemicals such as 245T was not an uncommon practices at the time when the dam was built.
The Timaru District Council, which takes some of its drinking water from an aquifer below the dam, has sought advice from a medical officer of health.