Bonny Reservoir, a much-loved tourist spot in eastern Colorado, is being drained after the state exceeded its allowance under a 1942 agreement with its neighbours on sharing the Republican River.
The case has highlighted growing tensions over the security of the water supply to the west of the US, which in recent years has suffered repeated droughts, prompting warnings of disaster.
"It is a tragedy," said Alexandra Davis, the assistant director of water at the Colorado Department of Natural Resources. "We are facing a huge loss.
But it is the best of a number of bad options."
The gates of the reservoir have been opened, allowing the water to run naturally along the Republican River to its new home states. Biologists have been scrambling to move the fish that bring thousands of anglers to Bonny each year.
"It is a really bad deal," Kenneth Condrey, the owner of the nearby Pappa’s Bait Shop, told The Daily Telegraph. "It was such a beautiful spot, and they’re taking it away from future generations."
Mr Condrey, who has run his shop in Burlington for 11 years, said he would almost certainly be forced to close and move back to his native South Carolina.