Hyponatremia - where vital levels of sodium in the blood become abnormally low - occurs when too much of the liquid has been consumed.
It can cause lethargy, nausea, convulsions and even lead to a coma and if left untreated, it can lead to death within just a matter of hours.
Lead researcher Dr Michael Farrell, from Monash University, Melbourne, said: "If we just do what our body demands us to we'll probably get it right - just drink according to thirst rather than an elaborate schedule.
"Here for the first time we found effort-full swallowing after drinking excess water which meant they were having to overcome some sort of resistance.
"This was compatible with our notion that the swallowing reflex becomes inhibited once enough water has been drunk.
"There have been cases when athletes in marathons were told to load up with water and died, in certain circumstances, because they slavishly followed these recommendations and drank far in excess of need."
Researchers asked people to rate the amount of effort required to swallow water under two conditions.
Functional magnetic resonance imaging was used to measure activity in various parts of the brain - mainly focusing on the brief period before swallowing.
Participants were measured after exercising when they were thirsty and later when they were persuaded to drink an excess amount.
The results showed a three-fold increase in effort swallowing after over-drinking.
But scans showed the right prefrontal areas of the brain were more active when participants tried to swallow with effort.
Researchers believe the frontal cortex steps in to override the swallowing inhibition so drinking could occur.
However, Dr Farrell said elderly people often don't consume enough and should watch their intake of fluids.
If water enters the body more quickly than it can be removed then electrolytes in the blood become diluted.
This causes the water to travel through the blood and pass into cells and organs such as the brain - affecting its ability to function.
The study was published online in the Proceedings of the National Academy of Sciences.