The department says the Town of Bridgetown has confirmed that a pipe is releasing untreated sewage into Solomon Chute.
As a result, residents are being told to avoid contact with the stream.
That includes swimming in, drinking from or eating fish from water sources north of Jubilee Park, including the Annapolis River.
The town says it is fixing the problem, but it remains unclear how much sewage has spilled into the brook.
The Environment Department says the release has not affected the town's drinking water supply.