"If you or your pets experience health symptoms after contact with contaminated water, contact your doctor or vet immediately," Mr Hathaway said.
He described the toxin as causing "a thick surface scum" covering localised areas of the lake shoreline.
Also noticed was a light blue/white streak of decaying cells that are releasing pigments. This was a common occurrence during bloom decline, he said.
"Cyanobacteria occur naturally but can increase rapidly during summer months. If the water is cloudy, discoloured or has small globules suspended in it, avoid all contact.
"Not all cyanobacterial blooms are visible to the naked eye and toxins can persist after the bloom has disappeared.
"Cyanobacterial concentrations can change quickly with changing environmental conditions, like wind. If a health warning is in place, avoid contact with the water."
Mr Hathaway said the council would continue to monitor the lake and people would be advised of any significant changes in water quality that could affect public health.
Toxic algae has been found in Henley Lake over many years in the past, including last summer when it was also discovered in the Waipoua River at Colombo Rd and the Ruamahanga River at Kokotau.