It is unclear if a parasite barrier will be installed on an uncompliant water supply in Christchurch.
Water regulator Taumata Arowai last week wrote to the Christchurch City Council and 26 others which do not have protection against protozoa and other parasites on some of their supplies.
Collectively, the drinking water supplies missing a protozoa barrier (such as a UV treatment system) provide water to over 300,000 people.
The Christchurch supplies alone serve more than 168,000 people.
Taumata Arowai sent notices to the non-compliant councils after a cryptosporidium outbreak made dozens of people sick in Queenstown.
There had been 65 confirmed cases of illness so far, which was believed to have stemmed from human faecal contamination of a water supply drawn from Lake Wakatipu.
The affected Two Mile supply has no protozoa barrier and residents remained on a boil water notice until one could be installed.
In a statement on Monday, Christchurch City Council confirmed it had received the non-compliance letter and was considering its next steps.
The city's situation was unique and a plan was already in place to make it compliant, the council's head of Three Waters Brent Smith, had previously said.
"We have high quality drinking water drawn from deep aquifers. Based on extensive studies there is evidence to show that the risk of protozoa contamination is very low. In most contamination events involving protozoa the water supplied to residents is sourced from rivers, lakes or very shallow aquifers. Other potential sources are animals entering reservoirs and UV would not help this," he said.
"In order to be compliant with the protozoa related rules set by Taumata Arowai we need to have UV sterilisation installed or have proved 'Class 1' water. Christchurch has spent significant funds in the past years to secure our wells to attain Class 1 status, which according to the Drinking Water Quality Assurance Rules do not require a protozoal barrier."
According to Taumata Arowai, Class 1 status meant water drawn from a depth of more than 30 metres below ground by a sanitary bore head in which E. coli and other bacteria had not been detected over a period of three years (proven by monthly samples).
Where the council did not expect to achieve this status, UV treatment had been installed or the pump stations were no longer used for drinking water, Smith said.
Christchurch's water sources had previously been compliant but a rule change meant further testing was now needed to become compliant again, he said.
"Although the Christchurch supply is non-compliant at present the water is safe to drink," he said.
Surface water sources had until the end of next year to be compliant and operational, Taumata Arowai said, while bore water sources had until the end of 2025.