Gisborne District Council says it has just 24 hours' worth of water left in its reservoir storage after a major leak was discovered in the water mains.
It has made an urgent plea for residents to conserve water, and industrial users must immediately put their water shortage contingency plans into place.
Mr Foon said the leak was found in the 40km pipeline that runs between the dam and a reservoir.
A broken seal has been identified as the source of leak which needed to be welded, he said.
Food processors, who are the largest users of water at this time of year, would be most affected, Mr Foon said.
The council said contractors were excavating at the site of the leak at Makaraka and repairing it could take until 2am.
A total ban on all outdoor water is in place - which means no car washing, watering lawns or filling swimming pools.
Meanwhile, a back up water plant is being prepared take water from the Waipaoa River to supplement water supplies.
The council said the river water was harder and people might notice a difference in taste, but it was safe to drink.
Mr Foon told Checkpoint the leak was discovered when water started coming up from the pipe on to the road.
He said it has highlighted the need for a greater focus on infrastructure.
Gisborne residents will have to conserve water for three days.