The algae is not toxic, but at this density it can cause skin rashes, nausea, stomach upset and tingling and numbness around the mouth or finger tips.
Anyone experiencing symptoms is advised to see a doctor, and tell the doctor they have been in contact with the lake water.
It could be harmful to humans and animals if swallowed, or contacted through swimming, kayaking or water skiing.
Boiling the water will not prevent it being potentially harmful, Whanganui District Health Board says.
The lake is sometimes stocked with trout but fish can concentrate any toxins, and should be avoided. If people wish to eat them, their guts and liver should be removed and they should be washed in clean water first.