A red alert has been lifted at Burrendong Dam near Wellington as blue-green algae concentrations have decreased over the past couple of weeks.
But WaterNSW is advising users of the dam that "some potentially toxic species are still present".
"Water users should avoid algal scums if present in water sources," its spokesman said.
"As the red alert has been lifted there are no longer any restrictions on recreational activities in the lake."
Updates about blue-green algae blooms and red level warning areas can be obtained by calling 1800 999 457 or visiting http://www.waternsw.com.au/algae.