British Waterways has launched a clean-up after the pollution was discovered in the River Don downstream of the Magna Science Adventure Centre between Sheffield and Rotherham.
The pollution – thought to be from oil which seeped into the river – was also discovered in the nearby Sheffield and South Yorkshire Navigation Canal and as far downstream as Aldwarke Lock.
The leak is so serious that boat owners have been warned to steer clear of the area until the clean-up operations are completed.
The pollution – which killed more than 1,000 prime roach as well as many other fish such as chub and dace – is a serious blow to the waterway which is now a popular angling spot. Fishing matches are regularly won by catches running into tens of pounds.
Once grossly polluted, the River Don and the nearby canal have improved so much in recent years that they now support a wide range of wildlife.
Environment experts say they are prime examples of how polluted waterways can be cleaned up.
A British Waterways spokesman said they had been called in and have been joined by a specialist contractor.
"Boat-owners and commercial carriers have been informed that they will be unavoidably delayed until the problem is sorted out," said the spokesman.
An Environment Agency spokesman said the cause of was still being investigated.
"We are investigating the spillage of oil and the cause of the fish deaths. We do not know the cause yet."
n COUNTRYSIDE campaigners have condemned a decision to lift fish from a Sheffield nature reserve, claiming the move will "further victimise" anglers.
Sheffield Council has removed all large fish from Shire Brook Valley nature reserve in Hackenthorpe for the second year running on the grounds of public safety.
Last summer a teenage boy carrying a fishing rod suffered burns to his hands and feet after receiving a serious electric shock from an overhead power cable.
The council said it had decided to remove the fish after anglers ignored signs banning fishing.
John Haigh, the Countryside Alliance regional director for Yorkshire, said: "As the leading campaigning organisation for anglers' rights, we naturally put personal safety and security at the top of the agenda.
"However, the injury to a young angler last year was highly improbable and likely never to be repeated. We call for a rethink on the policy."