Water levels in the River Torrens dropped by more than two metres last night.
A malfunction caused the weir gates to open causing the water loss. This triggered an alarm and Adelaide City Council workers had to manually close the gates to stop the flow of water.
The higher sections of the Torrens Lake have been the worst affected, with the bottom of the Lake now visible in several locations.
An electrical malfunction is suspected to have caused the gates to open but a complete investigation is underway.
The river was closed yesterday after an outbreak of blue-green algae reached unsafe levels. Signs were erected advising the public to avoid contact with the water.
Adelaide City Council has started notifying businesses that are affected by the drop in water levels, including the operators of the Popeye.
The Lake is unlikely to refill until water flows from the catchment area upstream following a rainfall event.