Residents in Nepal's Rasuwa district, on the border with China's Tibet, were seen rushing up hillsides on Friday to escape any surge in the river level, according to a Reuters witness.
The risk of the lake bursting prompted all Chinese rescue personnel and vehicles to withdraw to stand by in a safe area, state broadcaster CCTV said on Friday.
Authorities in Nepal have stopped rescue operations for the next 90 minutes, an army officer said.
The confirmed death toll from the glacier collapse in the region on Wednesday rose to 469 in Nepal, with almost 1000 more missing there and in Tibet.
A huge torrent of rock, ice, mud and debris cascaded through Himalayan mountain river systems after the collapse.
The flood ripped through villages and valleys, destroying power stations, roads and bridges along a route that links Kathmandu with Lhasa in Tibet and is popular with trekkers and pilgrims.
Of those missing, at least 540 are foreigners.
In its wake, debris had formed a barrier lake that was threatening further flooding on devastated downstream communities.
China mobilised an eight-member engineering team to conduct aerial surveys and 3D modelling of the lake on Thursday.
By Friday, the lake's reservoir had topped 2.5 million cubic metres of water, up from the estimated 1.5 million-2 million cubic metres the engineering team recorded a day ago.
Downstream in Nepal, authorities received warning that the glacial lake had broken its bank, said Narendra Pariyar, the most senior bureaucrat in hard-hit Rasuwa district.
"We can see that the level of water in the river is rising," he said, adding that it was unclear how high the water level was.
Earlier, Nepalese rescue teams used helicopters to search for survivors and drop emergency supplies to thousands cut off in towns and valleys, while emergency services - some using sniffer dogs -recovered dozens of bodies swept down into the plains.
Dibga Tamang was among the last people rescued from Rasuwa on Thursday, airlifted along with three others to an army camp in Nuwakot.
"All of our people have gone. They are dead," Tamang said.
"I have no one left waiting for me. Everything and everyone is gone. The end."
While offers of assistance are pouring in, Nepal has said it does not need help from other nations in search-and -rescue missions.
"The offer for help is natural. Our security agencies are doing the search and rescue operation. For now we don't require such help," Lok Bahadur Chhetri, spokesperson for the foreign ministry said on Friday.
President Donald Trump said the US had offered support to Nepal.
"Nobody's ever seen anything quite like that, where very powerful, strong, well-built buildings were wiped out like they were toothpicks. It's a terrible thing. We are sending aid and we've spoken to the leadership and we let them know anything they want, they'll have."
A South Korean rapid response team is already in Kathmandu but has not been deployed because the Nepali government does not have a plan to accept foreign rescue yet, according to the foreign ministry in Seoul.
Chinese rescuers had yet to reach the worst-hit area on the Chinese side of the border, the Gyirong border crossing, by Thursday evening, state media reports indicated, as crews worked to clear debris from the key access road leading to the area.
Dramatic footage on Wednesday showed enormous torrents of muddy water and debris tearing through structures in the border crossing area within seconds and engulfing people trying to flee.
The tally of missing in Tibet's Gyirong County was 558, Chinese state broadcaster CCTV said on Thursday, including 260 foreign nationals.
So far, just three people have been confirmed dead on the Chinese side.
Around the world, relatives of those missing were desperate for information about their whereabouts.
with AP and DPA
