The NSW Department of Primary Industries said it had detected a species of algae which produces paralytic shellfish poisoning toxins.
It said it found toxins above safe levels for human consumption in shellfish from Botany Bay during routine monitoring on Friday.
The NSW Food Authority has warned people against eating oysters, mussels, cockles, clams or the gut of rock lobster or abalone taken from the bay or the Georges River.
It's also warning people against eating periwinkles, sea urchins or crabs.
Cooking won't destroy the toxins, it said.
Anyone who experiences symptoms of paralytic shellfish poisoning are being advised to seek medical assistance.
Symptoms include tingling in the mouth, pins and needles, unsteadiness on the feet, weakness of the arms or legs and nausea.
Shellfish bought from commercial seafood outlets were not affected, the Food Authority said.
