Infectious disease outbreaks are considered an important factor for the degradation of coral reefs. Reef-building coral species are susceptible to the influences of black band disease (BBD), characterized by cyanobacteria-dominated microbial mat that migrates rapidly across infected corals, leaving empty coral skeletons behind. We investigate coral-macroalgal phase shift in presence of BBD infection by means of an eco-epidemiological model under the assumption that the transmission of BBD occurs through both contagious and non-contagious pathways. It is observed that in presence of low coral-recruitment rate on algal turf, reduced herbivory and high macroalgal immigration, the system exhibits hysteresis through a saddle-node bifurcation and a transcritical bifurcation. Also, the system undergoes a supercritical Hopf bifurcation followed by a saddle-node bifurcation if BBD-transmission rate crosses certain critical value. We examine the effects of incubation time lag of infectious agents develop in susceptible corals after coming in contact with infected corals and a time lag in the recovery of algal turf in response to grazing of herbivores by performing equilibrium and stability analyses of delay-differential forms of the ODE model. Computer simulations have been carried out to illustrate different analytical results.