Water treatment plants (WTP) take in source waters then remove 95-99% of blue-green algae (cyanobacteria) cells and the toxins they produce. During this removal process waste sludge is generated and transferred from clarifier tanks in the treatment plant to lagoons. It was thought that confinement in the sludge killed the cyanobacteria, but this research found that when algal blooms have generated very high cell numbers, viable, toxin-producing cyanobacteria are retained in the sludge and can release toxins into the clarifier supernatant. It was concluded that timely removal to lagoons will avoid problems, and it is recommended that risk assessment for recycling lagoon supernatant back to the head of the WTP should incorporate extended times of 3 to 4 weeks after the end of algal blooms, to ensure cyanobacterial cell death and toxin degradation.