Environment Agency staff have tested the Walsall waterway for sodium cyanide and other chemicals. Anyone who has taken any fish from the canal should not eat them. Drinking water supplies are not affected.
The alert came as the suspected source of the spill was identified by the agency as specialist surface and sealings firm Anochrome Ltd.
It is understood the company referred itself.
An agency spokesman said: "Pollution of this kind is unacceptable and the impact on wildlife and the environment can be severe. We will take robust enforcement action if noncompliance is uncovered."
Walsall Council said there was a potential serious health risk to anyone who had contact with the water in the affected stretch of canal.
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