The Department of Conservation has issued a high alert warning for the Young Valley dam near Makarora in Mount Aspiring National Park.
Heavy rain is forecast in the next 24 hours with up to 300mm possible in some areas, which could cause the dam to breach and flood the valley below.
The Wanaka visitor centre is warning trampers and walkers to stay out of the Young Valley until further notice.
The Young Valley dam formed in September 2007, following a landslip, which created a 2km lake.
DoC says the warning is a precaution at this stage.