Queenstown's mayor expects to have timings for the for UV treatment against cryptosporidium to be installed in the Two Mile by the end of next week.
Mayor Glyn Lewers said 18 cases of infection from the parasite had been confirmed.
National water regulator Taumata Arowai has served a compliance order on Queenstown Lakes District Council for its Two Mile water treatment plant, which does not have a protozoa barrier to stop cryptosporidium entering the water supply.
A boil water notice must stay in place until it is upgraded or switched to another supply.
The area's other treatment plant, Kelvin Heights, had a protozoa barrier but there were doubts it was working, the regulator said. Once it was satisfied it was operating the boil water notice for the plant could be lifted.
Lewers had earlier told Morning Report Queenstown could face an extended period of having to boil water until the area's treatment plants were upgraded.
"I would say our best case would be months, at this point."
In an update on Thursday Lewers said the council was opting for UV treatment for the Two Mile treatment plant as it was the quickest to install.
But that would not eliminate the risk of boil water notices in some situations, such as a decrease in water clarity.
The more effective protozoa barrier was more expensive but was more effective as a permanent solution. Council infrastructure operations manager Simon Mason said the cost of the UV system would be in the millions, and the barrier would cost about $30 million.
"I have instructed the team I want a plan by the end of next week with timings so I know exactly what is going on and when it will be done, and that will be communicated to the community," he said.
He said his assessment of months of boil water notices was a "worst case scenario".
The investment plan for water supply upgrades had been in the long term plan and there was a programme of work under way, he said.
A business response group created during the Covid pandemic was meeting on Thursday afternoon on the water supply situation.
"We will look at providing a source in town if that's what the businesses want."
Council infrastructure general manager Tony Avery said they were investigating tankers used at public events, which are plumbed into the main supply and had a protozoa barrier in them.
Lewers said there were now 18 confirmed cases and there would be a further update today.
Residents should continue to boil water, follow good handwashing hygiene and go to a doctor if feeling unwell.