A shark alert has been issued for Fishermans Beach in Port Kembla and surrounding waters on Tuesday afternoon.
The warning comes after a whale carcass washed up on a rock platform at the southern end of the beach.
A large number of sharks have since been spotted in the area, according to Surf Life Saving Illawarra.
SharkSmart reported a 3.5-metre tiger shark had been sighted by surf life savers at Port Kembla about 2.29pm.
Port Kembla Water Police acting sergeant Josh Shelton said the humpback measured 8-10m long.
Police towed it ashore after a Wollongong council worker got a line around the creature's fluke.
"They used to tow whales out to sea, but they become a navigational hazard," said Sgt Shelton.
"The practice now is to remove them from the water."
The whale carcass was set to be towed to Port Kembla Harbour for disposal later on Tuesday.
Port Kembla beach was immediately closed and council installed warning signs at Port Kembla, Fishermans and MM beaches. advising surfers, swimmers and divers to stay out of the water.
A spokeswoman for Wollongong City Council said:
"We will continue to monitor this activity over the coming days, and will look to reopen the beach once it is deemed safe."
"We worked with National Parks and Wildlife Services and NSW Police to safely remove the whale carcass from the site and coordinate its disposal. The whale will be buried at Wollongong Waste and Resource Recovery Park [Whytes Gully]."
In September last year, a whale carcass sparked a feeding frenzy for sharks as it floated past Bulli ocean pool.