City officials were posting warning signs and police officers and lifeguards were at the beach to warn visitors and residents about the contamination.
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Waikiki is home to many of the state's biggest hotels and is the engine of Hawaii's tourism-dependent economy.
"What you have behind me is a major sewage backup," said Lori Kahikina, director of the city's Department of Environmental Services told reporters according to NBC affiliate, KHNL. "With the heavy rains, it overwhelmed our system."
Shayne Enright, a spokeswoman for the department, added: "We don't know right now what is in the water. You could get a serious infection, get extremely sick or even worse.”
Steve Casar of the Waikiki Yacht Club told KHNL that contaminated water came close to flowing onto club property early Monday before subsiding.
"I saw a lot of water that smelled bad and basically it was over the road," he said.
Visitors were also advised to remain out of waters between Kewalo Basin and Ala Wai Boat Harbor as well as the canal along Ala Moana Boulevard.
"As it goes into the recreational waters... we're going to advise the public to stay out of the water," Matthew Kurano, environmental health specialist with Hawaii’s state Health Department told KHNL.
The problem was partly caused by residents opening manholes to prevent their homes and cars from flooding after storm drains backed up, Kahikina told reporters. The missing manholes allowed rainwater to flow into the sewage system, overwhelming it.
Alastair Jamieson is a London-based reporter, editor and homepage producer for NBC News.