A Clutha District drinking water supply is the only South Island reservoir to fail all of the Ministry of Health's standard levels.
The ministry released its Annual Report on Drinking Water Quality late last month, which monitored water supplies around the country between 1 July 2016 and the 30 June 2017.
Glenkenich Rural supply, which services 705 residents, was non-compliant with the standards for bacteria, protozoa and chemical levels.
Less than a third of small suppliers, which provide drinking water to populations between 101 and 500 people, met the ministry's standard around the country.
That includes popular tourist destination Milford Sound, which has a population of 350 people and will have one million tourist visits next year.
Its water supply failed to comply with bacteria and protozoa levels.
The privately owned company, Milford Sound Infrastructure, that owns and operates water supply networks in the area has yet to respond to interview requests from RNZ.
Overall 81.1 percent of New Zealanders received drinking water up to standards.
Other water supplies that failed on all three accounts include Feilding in the Manawatū District, Acacia Bay in the Taupō District, and Retihi and Waiouru townships in the Ruapehu District.