Pramote Pingmuang, a senior engineer of the Phayao Irrigation Project, said the lake, which has a capacity of 33 million cubic metres, has seen its water level drop to 9.45 million cubic metres.
He said the irrigation office has shut the watergates to preserve raw water for making tap water.
Pramote said local people should minimise their use of water as the ongoing drought could further affect the lake's water level.
Somchart Thamkhantha, director of the Phayao Freshwater Fishery Research and Development Office, said fishery officials were now monitoring the lake's water quality due to worries about its impact on fish in the lake.