The iconic and critically endangered Burrunan dolphin (Tursiops australis), resident to the Gippsland Lakes, Victoria, Australia, is under immediate risk of localised extinction. A recent mortality event has seen the death of at least 35% (known and presumed) of the maternal-based population, with an additional 40% remaining ‘missing’. Recent devastating bushfires and sustained rainfall has seen complex environmental changes to the Gippsland Lakes, such as increased sedimentation, dramatic salinity declines, temperature changes and anoxic conditions. Ulcerative dermatitis, known as freshwater skin disease (FWSD), has recently been characterised in dolphins, and linked an abrupt and marked decline in salinity, with prolonged exposure to hypo-saline conditions resulting in ulcerative skin lesions, and in some cases, death. Here we document a severe FWSD lesion outbreak and mortality event, alongside assessment of environmental conditions throughout 2020-2022. We provide case studies across the outbreak period, from those that resulted in death, to others showing signs of possible recovery. Of the known deaths, all showed severe ulcerative lesions across their entire body, with secondary bacterial and algal matting. Following this significant mortality event, we predict major short and long-term impacts to the population’s viability, and greater concerns about the species’ persistence and risk of extinction.