A burst pipe at the main pump station in Bluff is discharging sewage into Bluff Harbour.
The Invercargill City Council is advising people not to swim or collect shellfish from the harbour until further notice.
It's working with Environment Southland and Public Health South to identify the extent of the issue and put remedial measures in place.
The Council is urging residents to help to limiting their water use.
Repair work may not be completed until tomorrow.