Wellington City Council is urging people to stay clear of the water in the area until further notice.
Water-quality monitoring in the past two days found that the presence of enterococci - a bacteria and indicator of microbiological pollution, including sewage - in Owhiro Bay at a level likely to cause a health hazard.
The Council has taken the action following consultation with Regional Public Health staff.
City Council Infrastructure Manager Haydn Read says the source of the contamination is not obvious. Water samples are being taken at various points in the Owhiro Stream and local sewer mains are being checked as a matter of urgency.
The presence of enterococci in the water indicates it is unsuitable for swimming or recreational contact. Health problems that can be associated with the ingestion of contaminated water include diarrhoea, stomach cramps and vomiting. In addition, cuts and skin lesions can become infected.