It can also cause skin rashes, stomach upsets, and in some cases neurological effects such as tingling around the mouth, headaches, breathing difficulties and visual problems.
Signage will be erected at the Ohau Channel.
The health warning issued last December for Okawa Bay at the western end of Lake Rotoiti remains in place.
Lane said algal blooms can develop rapidly and unpredictably and can sometimes produce toxins harmful for people as well as animals.
"If the water looks discoloured, has an unusual smell, or has green or brown particles floating in it then it is best to avoid contact with it."
Up-to-date information on health warnings for the Bay of Plenty and Lakes districts can be found here.