The Water Corporation is warning people not to swim, dive, kayak or fish within one kilometre of a wastewater outlet off the coast of Cape Peron in Rockingham.
Testing of water near the outlet, four kilometres from the shore, has been showing elevated microbiology levels since mid-February.
More than 150 dead mullet, along with some jellyfish, washed up on the Safety Bay foreshore on March 28, but they were too decomposed to determine if there was a link.
A Water Corporation spokeswoman attributed the rise in microbiology levels to recent works associated with a major upgrade of the Woodman Point Wastewater Treatment Plant.
The outlet has fed into a 20-metre deep channel running parallel to the shore since 1984.
Between 1991 and 1994 a Water Corporation study was conducted to determine the effects of nitrogen in the wastewater.
It found the effects of ocean disposal at the Point Peron outlet to be minor and not ecologically detrimental.
Wastewater in WA is diluted through physical and chemical processes to make it lighter and lower in density, so it rises and mixes with seawater to minimise the environmental impact.
However the Water Corporation said part of a $158 million upgrade to the Woodman Point facility had affected the efficiency of this.
The project is expected to completed by October 2019, but the work which is having an impact on the water quality is due to be completed before May.
Water Corporation was undertaking further testing to determine with more certainty when the water will become safe again.
It has apologised for any inconvenience caused to users of the ocean in the area.