A large chemical spill in Melbourne has left local waterways littered with dead fish. 

The spill occurred after a factory fire at an industrial area in Laverton North, in the city’s west. 

Authorities say up to 13,000 litres of surfactant (chemicals typically used in detergent or soap) was released into the waterways via stormwater drains.

The Environment Protection Authority (EPA) has launched a formal investigation. Reports say it has established the pollution entered into the nearby Cherry Creek, before following the creek's water flows east to Cherry Lake, which is used for fishing and recreational activities in Altona.

Fish and eels have been reported floating dead in large numbers across the lake's surface in recent days.

Cherry Creek continues through the lake to meet Port Phillip Bay near a popular Altona dog beach.

EPA regional manager for the western Melbourne area, Steve Lansdell, has told reporters that EPA officers are testing water along the creek, and have received reports of dead fish on the beach.

Mr Lansdell says Melbourne Water and the EPA have been working together to manage the situation.

“With the incident, we were straight onto it, working with a lot of agencies as we do,” he said.

“It's been a good team effort.”

The authorities have asked people not to fish at Cherry Lake or let their dogs swim in the lake for now.