Dead fish are lining the shores of Walkers Lake in Avon Plains.
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A Northern Grampians Shire spokesperson said Council was aware of a fish kill event, involving redfin and some golden and silver perch.
The spokesperson said there was a significant algal bloom over the last month or so at the lake and there was a history of summer blue-green in the system.
"There has been some decomposing weed and blue-green algae present in the water recently and the likely cause of the fish kill appears to be a severe lack of oxygen in the water," they said.
"When algal blooms die off, associated with sudden temperature drops, it causes algae to decompose and strip dissolved oxygen from the water.
"This, along with the algal bloom increasing in the recent humidity, is the likely cause of the fish deaths."
Northern Grampians Shire Council has been in contact with the Victorian Fisheries Authority and the Environment Protection Authority which are both investigating the cause of the fish deaths.
"Council is arranging a water quality sample to determine if any additional factors contributed to the fish kill," the spokesperson said.
"Council has organised a clean up working bee at Walkers Lake tomorrow at 8am and all are welcome to attend to help remove the dead fish from the waterway."
Council advises anyone visiting the Walkers Lake area to take precautions and avoid direct contact with the lake water while water quality testing is underway.
More to come.
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