Menindee locals, including Rob Gregory, have posted videos and images on social media showing large numbers of dead fish in a bid to draw attention to the plight of the region, including the Darling River.
Rob McBride, whose Tolarno grazing station lies to the south of the main fish kill region, said 250,000 livestock and millions of native animals are at risk from the increasingly toxic water in the river.
The stench "is just deplorable - it's something to make you retch", Mr McBride said, adding a neighbour's sheep had died during the first outbreak of blue-green algae around Christmas. "It's killing our businesses, our community and our fish."
The immediate trigger for the latest fish deaths was a sudden drop in temperatures over the weekend. That killed much of the algae, which in turn lowered dissolved oxygen below critical levels.
The Christmas event killed about 10,000 fish but the second, larger one probably "killed hundreds of thousands and up to a million fish", said Richard Kingsford, Director of the Centre for Ecosystem Science at the University of NSW.
Professor Kingsford said the Menindee Lakes had been drained more often than in the past - including twice in the past four years - making such diasters more likely: "It's a classic example of nature biting back."
Darryn Clifton, a spokesman for the Broken Hill-Darling River Action Group, said the deaths may extend as far as 30-40 kilometres of river. Murray cod, as long as 1.4 metres in length and perhaps 100 years old, are dying.
"It's an absolute disaster," he said. "You're losing a century or more of breeding stock."
The region is a key breeding area for endangered fish species, such as the golden perch.
A spokeswoman for the Murray Darling Basin Authority said "a great many of the water issues in the northern basin can be traced to the ongoing, intense drought".
While storages in the northern basin were about 20 per cent full. In the lower Darling, levels were low as 5 per cent full "so there isn’t the quantity of water available to environmental water holders to make a difference to current conditions," she said.
Bureau of Meteorology data show that the basin overall had one of its driest years on record in 2018 with rainfall averaging less than 300 millimetres.
Evaporation levels made conditions worse, though, with the basin also hit with the region's highest maximum and mean temperatures by some margin.
Jeremy Buckingham, the former NSW Greens and now independent MP, said the Darling River "is dying right before our eyes".
“The huge extraction of water for big irrigators is literally choking the life out of the system downriver and leaving stagnant, blue-green algae infested dregs for everyone else," he said, arguing that the Menindee Lakes had been drained "to spare upstream irrigators from contributing more water for the environment".
Labor's water spokesman, Chris Minns, called for an urgent investigation "to get to the bottom of this shocking environmental disaster".
"It is even more reason why the government’s plans to decommission most of the Menindee Lakes is such a dangerous idea," he said. "They have been repeatedly warned that Menindee is a fragile ecosystem and should be protected.”
Mr Blair said the Commonwealth and other states controlled flows out of Menindee when capacity was above 480 gigalitres: "We're looking at the operating rules around the Menindee Lakes and what we can do."