The footage was taken by a local resident and caused a stir when it appeared on the national broadcaster's webpage.
The river worm is the most famous monster in Icelandic folklore, first mentioned in 1345.
But skeptics argue that the video shows an ordinary fishing net moving in the water after ice melted.
One thing is certain: it's doubtful the truth will be uncovered any time soon.
Follow Emirates 24|7 on Google News.