A "minor" spill of about 1000 litres of sewage near the Frankton track about noon yesterday is being investigated by the Queenstown Lakes District Council.
Water Services manager Garry McGraw said most of the spill soaked into gravel, although "undoubtedly" small quantities had entered Lake Wakatipu,.
"The spill has not come from a sewerage network but has entered the area via a stormwater system."
While the council contractors were able to trace the stormwater system to Queenstown Hill, the trail "ran dry".
"There is no reason for this material to be in the stormwater system.
"It's possible that we are dealing with material that has been placed down a wrong manhole," he said.
The area was sanitised yesterday and lake water samples taken as a precaution.