Archaeologist Peter Forgeng said excavation had begun in one of the lake's bays when stone tool fragments were noticed by a First Nations monitor at the water's edge.
"The monitor... stopped the project and contacted an archaeologist friend of his who was in the area who came out and confirmed that these were in fact artifacts," he said.
Forgeng says the bay was used by the Ktunaxa (Kootenay), Okanagan and Shuswap First Nations long before colonial contact.
The stone fragments will be curated and the village will need a permit to keep building its $14,000 boat launch.
"They are not planning to do any more ground alteration in the area... They have to get a permit under the Heritage Conservation Act for them to proceed."
Forgeng says his department, the B.C. Archaeology Branch, should be able to grant the permit in time for the village to start building its launch before the summer boating season.