HBRC water quality scientist Dr Andy Hicks said the oxygen levels at the lake were only about 20 per cent on Friday morning and before Christmas they had been 80-90 percent.
"The bloom...I think that's finally died off and in doing so it's sucked all the oxygen out of the water."
The air curtain was designed to reduce the frequency and severity of algal blooms but one had already been established in the lake before the trial started so there was always a possibility of something like this happening, he said.
"We don't expect the full benefits of the air curtain to be realised until next season."
It will be turned off over winter and turned on again before spring which should prevent any major algal blooms occurring next season, he said.
"It's very common to have large oxygen slumps when blooms die but it's a bad sign when fish die. It's a problem and it's something that shouldn't happen."
There were still a lot of alive fish in the lake so there would have been pockets of the water with better oxygen levels.
Dr Hicks would also be looking into whether the air curtain was working at full capacity in the few days leading up to the fish kill because on Friday morning it didn't seem to be producing as many bubbles as usual.
By Friday afternoon it was and a serviceman found no evidence of capacity issues, he said.
The expectation now was that oxygen levels would be able to return to normal due to the algal bloom dying but the timeframe for this was uncertain due to the bloom needing to break down.
"I'm still confident that air curtain is the right track to be on for these lakes," Dr Hicks said.
The curtain had proved a success early on with a rapid increase of oxygen levels at the bottom of the lake from zero to 100 per cent.
The area is one of six identified in the HBRC's annual plan as environment hot spots needing attention.
The air curtain involves pressurised air being pumped through a 50-metre pipe tethered close to the bottom of the lake and across the deepest part.
The air curtain is designed to increase oxygen levels at all depths throughout the lake by creating a circulation current, much like bubbles in a fish tank.