Residents in Taupō township have been told not to flush their toilets for at least tonight and are being warned to stay out of the water.
Businesses are still running as usual.
Taupō District Council chief executive Gareth Green said contractors had temporarily repaired the wastewater pipe by using overland pipes, hoses and pumps until a more stable solution was in place. It would take weeks for the permanent repairs to be done.
"We urgently need Taupō residents to refrain from flushing and putting water into the wastewater system until further notice," he said.
He said between 70 and 80 per cent of Taupō's wastewater had been pouring straight into the lake and the council could not be confident more wasn't entering the lake.
Green did not have an exact figure of how much wastewater had gone into the lake, but it was a "substantial volume".
Lake Terrace between Ruapehu St and Ferry Rd is closed for assessment.
The pipe went under the bridge to Nukuhau, and affected residents reported no water and low pressure. The council is advising people to avoid flushing toilets and taking showers, and against any other unnecessary water use such as doing the laundry.
"Every litre they don't flush at the moment is a litre less that has gone into the lake."
Waka Ama paddlers have also been advised to stay out of the lake until further notice.
Green said being winter there was very little recreational activity on the lake, but urged people to steer clear.
A Hamilton City Council spokeswoman said a notification was recieved from Taupo District Council and Waikato District Health Board outlining what had happened so precautionary measures at the water treatment plant could be put into place if needed.
"We are closely monitoring the Waikato River quality for any significant change and if needed we are able to shut down the plant and operate off our stored water in reservoirs around the city. There are no concerns regarding the quality of Hamilton's drinking water as a result of this event."
Taupo District council was working with Waikato Regional Council and iwi to begin the clean-up although it was unclear how long it would take.
People have commented on social media that they were "shocked" and "saddened" and worried that the lake's clean green image would be ruined forever.
Julia Smith said Kiwi councils seemed to have a slack attitude towards their supposedly pristine environments and wildlife. "Raw sewage into their waterways but also freeways built straight thru wildlife corridors without any care or consideration of the death & devastation this causes!"
Colin Smith said the council needed to be held to account over the Taupo spill when farmers like him were made to paid high rates and were restricted on the amount of stock to protect the lake.
Others questioned whether they would be able to swim in the lake by summer.
Updates will be provided on the council Facebook page.
