Environment Protection Authority Victoria (EPA) has received a report of about 20 dead black bream and one estuary perch near Seacombe boat ramp in McLennans Straight in the Gippsland Lakes.
Fish are being collected for analysis with water sampling also scheduled to take place.
Initial indications are that the cause is likely to be the decomposition of a red algal bloom occuring in the lake system, which reduces dissolved oxygen levels.
The fish deaths are not a result of the current pseudo-nitzschia algal bloom affecting parts of the Gippsland Lakes. Test results from this incident are due by the end of the week.
EPA is working with the Department of Health and Human Services and the Department of Environment, Land, Water and Planning to examine the fish deaths and to identify the cause.
Recreational fishers are reminded not to eat mussels, oysters and pipis collected from the Gippsland Lakes. This advice does not include prawns and fish. People should not, however, consume fish found dead in the lakes.
It's important to note that it is safe to eat any seafood and fish bought from local shops, served in cafes and restaurants or supplied by commercial fishers.