Hundreds of dead giant spiny crayfish were discovered by a tour guide in the area of Hazelbrook Creek, west of Penrith, on Wednesday.

An immediate investigation by council reported up to 1000 dead and dying crayfish in an area extending 600m downstream from Oaklands Rd.

Blue Mountains Council on Thursday told residents to avoid contact with water in the tributary of Hazelbrook Creek, near Horseshoe Falls.

Mayor Mark Greenhill said the council would work closely with the NSW Environment Protection Agency to find out the cause.

“Council advises against contact with the water in the creek, or the affected crayfish, until the cause of the deaths can be determined,” he said.

Mr Greenhill said the ban applied to humans and their pets, with signs set up at the location to warn visitors of the possible contamination.

In a statement, the council said the tributary drains a sub-catchment, with mainly residential developments in the local area.

The carcasses of the crayfish were promptly removed by the EPA for testing, with analysis also being undertaken on the water.

The agency expects the results to take at least one week, with further testing potentially ongoing as results become available.

The giant spiny crayfish, a local native species, face numerous threats, including dangers from run-off, pesticides and habitat destruction.

The Blue Mountains Council said crayfish traps were illegal in the myriad swamps and waterways of the popular hiking destination.

In 2012, more than 1000 crayfish died from a pesticide spill at Wentworth Falls, west of Hazelbrook.

The news also comes after a massive multi-agency operation in March to address a mass die-off in the lower Darling-Baaka River.