The phosphorus (P) release from bloom-cyanobacterium during its decline period is one of the most important parts involved in lake P-biogeochemical cycle, which is an important nutrient self-regulating process to sustain eutrophic status in lakes. An in situ experiment was set up to study the phosphorus release mechanisms of cyanobacterial blooms in Dianchi Lake during its decline period. In the enclosure, the cyanobacteria were dying out gradually and this process further affected the water quality parameters and lead to P release from bloom-cyanobacteria. The pH and electric conductivity (EC) increased substantially, while the redox potential (ORP) decreased during the whole experimental period. Among all the released P forms, the orthophosphate (ortho-P) was the main released P form and accounted for 96.7 and 67.8% of the total phosphorus (TP) increment in the water and the TP reduction in algae respectively. According to the TP in sediment and lost P of overlying water column, it could be concluded that the ortho-P released from algae was absorbed by sediment as well. The release of TP, organic P (OP), and ortho-P from bloom-cyanobacteria all followed the first-order kinetics, and the release rate of ortho-P was much higher than that of OP (p < 0.05). Furthermore, according to the total extracellular polysaccharide (EPS) determination and related Pearson’s correlation analysis, the release of TP and ortho-P from bloom-cyanobacteria would probably depend on the reduction of capsular polysaccharide (CPS) and colonial sheath disaggregation. In conclusion, a large amount of ortho-P was released and adsorbed by sediment gradually during cyanobacterial bloom decline period, and these bioavailable P could provide the sufficient nutrient for newborn cyanobacteria and could contribute to the construction of a new internal P cycle among sediment, water, and cyanobacterial bloom.