Queenstown Lakes District Council Chief Engineer Ulrich Glasner said routine water quality monitoring had shown elevated levels of the E. coli bacteria in the bay.
He said the findings could be related to the current weather conditions with high winds creating a choppy lake.
“We are recommending that people avoid contact with lake water and recreational activity such as swimming in the Queenstown Bay area as a precaution for the time being. Warning signs are being placed at multiple points advising this,” he said.
“We are resampling water quality this afternoon and will have the test results back tomorrow morning.
"We will then be able to provide a further update to the community. Resampling will take place daily and the Bay's status updated once test results show E. coli levels have subsided.”