The River Morda near Oswestry turned milky-white late following what is believed to have been a chemical leak from a tanker into the river late on Thursday.
An investigation is now being carried out by the Environment Agency, to find out the cause.
The Environment Agency warned people not to allow livestock and pets to go in the river.
Giles Cochrane, fishery manager at Weston Pools, described it as an "environmental disaster" with an entire eco-system wiped out.
The Environment Agency has warned people not to allow livestock and pets to go in the river.
Mr Cochrane said the fishery's pools itself were unaffected, but pollution had killed fish in the river, and posed a risk to other wildlife as well.
He said: "Five generations of fish have been totally wiped out.
"The trout population has been wiped out, the fry, next year's fry, the food they eat such as the shrimp and the caddisfly. The entire eco-system has been wiped out. It's caused complete devastation."
Mr Cochrane said Weston Pools had replaced the fish in the river about five years ago, after a previous pollution incident.
But following the latest incident the Environment Agency says devastation is such that fish could be absent from the river for a lifetime.
He said the leak was reported by one of the pool's anglers at about 6.30pm on Thursday.
"It was absolutely sickening to see all those dead fish, and we were concerned that the pollution would permeate through the soil and into our pools but thankfully the Environment Agency have assured us that won't happen," he said.
"Although this doesn't directly affect us, we have an obligation to make sure the public are aware of any abnormalities in the water. It's important people with dogs and farmers with livestock are made aware to keep away from the river because this is lethal."
On Thursday night the river had turned milk-white following the leak, but yesterday it was a greenish, grey colour, unlike its typically clear water.
United Utilities said it is investigating an issue at its treatment works in Oswestry and is working with the Environment Agency to resolve the situation.
A spokesman for the company said: "There has been an issue at Oswestry water treatment works which we are currently investigating. We are working closely with the Environment Agency to resolve this."
Jessica Jacques, spokeswoman for the Environment Agency, said: "On Thursday 19 January, we received a report of pollution in the River Morda, downstream of Oswestry, Shropshire.
"The Environment Agency immediately responded working with partners to identify the source of the pollution and manage any impacts. We have identified the source of the pollution and no further pollutants are currently entering the river.
"Public Health England have advised the public to avoid coming into contact with water in the River Morda at this time and should not allow animals to enter or drink the water, to avoid risk of skin irritation, irritation to eyes, nose, mouth and stomach.
"We are expecting to see an impact on the water environment from the pollution event including fish deaths along the River Morda.
"Our teams are out sampling water quality and monitoring the health of the river.
"We are informing local farmers and communities about the incident and working closely with partners to reduce any further impact to the environment, wildlife and people.
"We are unable to comment on the source of the pollution at this stage while investigations are ongoing.
"If anyone notices signs of fish in distress or impacts from the pollution please contact our incident hotline on 0800 807 060."