EPA Victoria is investigating the illegal dumping of chemical drums and truck tyres on the banks of the Buffalo River, Myrtleford.
CFA, Victoria Police, Alpine Shire Council and Goulburn Murray Water are also attending.
Public access is restricted as there is a strong chemical odour and the drums are leaking onto the ground.
Containment bunds are in place to prevent further spread of the chemical which appears to be a corrosive agent.
It it is believed that the chemical has not entered the waterway.
EPA Director Environmental Regulation Chris Webb said EPA would investigate the source of the waste, sample and track it back to its source.
"The environmental impacts of illegal dumping are significant," Mr Webb said.
"Run off from dumped chemicals contaminates land and local waterways, and creates a potential fire hazard."
Penalties for illegal dumping range from $1,200 to $704,000 if the matter goes to court.
Report pollution to EPA’s Pollution Hotline on 1300 EPA VIC (1300 372 842).