Chinese troops have begun draining a "quake lake" at Tangjiashan, formed behind a landslide after the 12 May earthquake in Sichuan province.
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More than 250,000 people have already been evacuated to higher ground.
Experts had warned the lake could burst at any time, sending millions of cubic metres of water down river valleys.
"Emergency work is still proceeding urgently, but in the foreseeable future there's no risk of the dam collapsing," Xinhua News Agency quoted Chengdu Military Region Deputy Commander Fan Xiaoguang as saying.
Engineers are monitoring bridges and river banks downstream to see if they will hold under the rush of water.
Work crews are trying to dig a secondary channel to improve the flow, China Central Television and the Xinhua News Agency reports.
Plans are in place to quickly evacuate an estimated 1.3m people who live in the surrounding area if the lake, just above the town of Beichuan, bursts.
The State Flood Control and Drought Relief Headquarters has warned of heavy rain across China, including Sichuan, over the weekend.
The threat posed by more than 30 quake lakes formed during the earthquake has become one of the most pressing issues in the aftermath of the quake.
Government figures put the quake death toll at 69,130 with another 17,824 people missing.
(BBC)
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