Tests have shown the Loch of Cliff in Unst has been contaminated with blue-green algae, the council advised today.
Inspections were carried out by environmental health staff after an algae growth was spotted in the area.
Notices were posted in local shops and next to the loch warning against contact with the algal scum. Adjoining land owners and those with fishing interests were also advised of the situation.
The Scottish Environment Protection Agency (Sepa) and Shetland NHS board were also notified.
The council says there has been no adverse effect on water supplies.