The raw sewage is leaking from the portable toilets into a car park outside when the toilets regularly overflow due to the amount of tourists using the amenities everyday.
Colac Otway Shire CEO Peter Brown stated they'd received report of the issue.
"Council currently has an arrangement with a local business which inspects and cleans the toilet facilities three times a day, including monitoring the level of the toilet tanks. The business operator became aware of the overflow, the toilet facilities were closed and a contractor was employed to pump-out the facility.
"To address the existing problem of the toilet tanks overflowing, Council will seek to install an alarm to provide an alert as to when the system is almost full. Council acknowledges the current temporary toilet facilities are not adequate to cope with the number of visitors to Kennett River and will urgently explore what further alternate arrangements can be made to address the situation before permanent facilities can be constructed."