Thousands of fish have died on the New South Wales north coast after a council bowed to public pressure and opened a lagoon, sending a deadly wave of de-oxygenated water surging down a nearby creek.

Key points: Thousands of dead fish have washed up on the banks of Tallow Creek, south of Byron Bay

Thousands of dead fish have washed up on the banks of Tallow Creek, south of Byron Bay The incident occurred after Byron Shire Council removed a sand bank to open a lagoon

The incident occurred after Byron Shire Council removed a sand bank to open a lagoon Council said they were pressured by the community to open up the creek as it was causing flooding in the yards of neighbouring residents

A sand bank was removed from Tallow Creek, just south of Byron Bay, following complaints from nearby residents about flooding in their yards.

Local conservationist Dailan Pugh said as the water rushed out to sea, oxygen levels in the creek plummeted.

"Because there was no rain occurring in the catchment at the time, it was inevitable that what they were doing would result in a significant fish kill," he said.

"There were thousands of bream and flathead and whiting and mullet and eels dead on the banks and more in the water.

"It was an environmental disaster … this was known that this was going to occur, council did it any way.

Heavy machinery clears a sand bank at Tallow Creek. ( Image supplied: Dailan Pugh )

"It's an environmental crime in my view and I think someone needs to be prosecuted."

The Byron Shire Council has permission to open the lagoon once water levels reach 2.2 metres.

Council blames community pressure

The council's flood engineer James Flockton said public pressure forced the council to act as soon as the trigger level was reached, although waiting for rain could have mitigated the risk of a fish kill.

"Staff here have been under increasing pressure from the community to go and open the mouth," he said.

"So once we did meet the trigger level a decision was made, mainly due to the pressure that we were under from the community to lower the water levels because of the impact to them.

"We're in a very tricky situation where we are trying to please the community, but we are also trying to protect the environment.

"It's really hard, it's really hard for staff making those decisions."

Dead fish on the banks of Tallow Creek. ( Image supplied: Dailan Pugh )

Byron Mayor Simon Richardson said it was a tragic and upsetting situation.

"Anyone who is working in this area, the last thing they want is to see fish kills," he said.

"It is a balance between trying to get the creek system operating as natural as possible, while allowing humans to live so close."

Byron Shire Council staff will meet with other authorities including the Cape Byron Marine Park Authority and Crown Lands next week to discuss the situation.