A report by the U.S. Army Corp. of Engineers says there is a likelihood of a catastrophic failure in the dam at Buckeye Lake.
The study of the 177-year-old earthen dam was requested by the Ohio Department of Natural Resources.
The report found that immediate replacement of the dam was needed.
"The safest solution for eliminating the risk of flooding due to dam failure is to drain the lake permanently," the report read.
The dam's structural integrity has been weakened by the more than 370 homes and other structures that have been "sunk into the 4.1-mile earthen dam embankment."
The homes and docks that were built have now caused the dam to slide.
By leaving the water level at winter elevation, less water will seep through the dam, according to the Corps.
The decision to drain the lake could prevent boating, which would cause a huge economic impact to the area.
The report says that people in the flood zone could be hit by an eight foot wave of water, mud and debris if the dam were to fail.
The Corps also recommended immediate public education about the risks, and stockpiling sandbags and emergency stone on site.
ODNR is reviewing the report. Officials say they will get public comment before any decisions are made.