The Environment Protection Authority is investigating Moira Shire after a "discovery and removal of contaminated soil from the retardation basin in Rowe St, Numurkah".
The News understands the contamination was caused by asbestos.
It comes after a May 28 investigation by the EPA when it issued the council with a Minor Works Pollution Abatement Notice requiring appropriate controls are enforced to prevent any hazard at Strathmerton Waste Transfer Station.
The EPA said its investigation was due to potential contaminated soil being transported to Strathmerton and Tungamah from the Rowe St basin.
“EPA officers are now reviewing information provided by the council and will consider the necessary measures required to protect the community and the environment,” EPA North East regional manager Renee Palmer said.
“EPA will continue its work to ensure the duty holders comply with Victorian regulations in any future transportation and disposal of waste from the sites.”
The News understands the nearest licensed facilities that accept asbestos are at Cosgrove, Greater Shepparton City Council and Bower in Rural City of Wangaratta.
Council's infrastructure general manager Andrew Close said the Rowe St basin project was started by the council to provide more storage capacity so it could handle storm events.
“We conducted prior testing before the project commenced and were well aware of the presence of bonded asbestos (asbestos sheet fragments),” Mr Close said.
“The EPA has been involved, particularly when we removed the excavated and screened fill, which was then sent to a closed landfill site.
“We also installed a system of air monitoring under the supervision of a licensed asbestos hygienist to ensure the site was safe for surrounding neighbours, our staff and contractors.
“We are awaiting advice from the EPA before we can sign-off on the completion of this much needed project.”