The annual event's ski race to be held on May 11 has been cancelled, but a boat convoy will now take its place.

Barry Carne Interstate Challenge organiser Jacinta Evans said the committee has no option but to cancel the ski challenge.

Ms Evans said the decision to cancel the race could mean a $1 million loss for Wagga because competitors will not be putting money back into the community.

"We usually have 50 boats, which come with four people plus support crew and spectators. They purchase fuel and book out accommodation," she said.

Ms Evans said it was not the first time the race has been at risk. It was almost cancelled last year after blue-green algae plagued the lake's waters.

Ms Evans said the Wagga Wagga Boat Club needs the annual event to survive.

She said the boat convoy from Wilks Park to the boat club will make a statement to the community and Wagga City Council.

"It is the final race of the year and the most talked about," she said.

"The lake being shut has a massive impact on the town. It is not just the boat club missing out, it is the whole community.

"The convoy is about getting the community to show the council we want the lake fixed. We are done waiting and want money put into it."

Wagga Wagga Boat Club commodore Mick Henderson has concerns about the lake's low water levels after the club was forced to postpone two races since January.

"It is a drought year, but we need to address this issue in the future," he said.

"This is a one-of-a-kind venue and Barry Carne Interstate Challenge is a major event held every year.

"Cancelling the race will have a financial impact on the club and will affect tourism in Wagga Wagga as well."

Destination Riverina Murray general manager Richie Robinson said the annual event was a tourism driver for the city, with people travelling throughout Australia to participate.

"It is unfortunate it cannot be held in its natural format, but I applaud the committee for thinking outside the box and keeping the event going," he said.

"We would like to see a healthy and vibrant lake and hope the event will be back bigger and better next year because it is a good spectacle for our town."

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