The National Party leader says a National government would scrap the Three Waters model and replace it with a sustainable system for drinking water, stormwater and wastewater - which would remain in local control.
Christopher Luxon said the current situation of failed pipes, wastage and huge ratepayer bills could not continue, but the answer was not Labour's Three Waters scheme.
A National government would set strict water quality standards and require councils to invest in the ongoing maintenance of their vital water infrastructure, he said.
Councils would be required to have a clear plan for that investment, with National establishing a Water Infrastructure Regulator to set and enforce standards, he said.
"While water quality regulator Taumata Arowai will set strict standards for water quality, National will establish a Water Infrastructure Regulator within the Commerce Commission to set and enforce standards for long-term water infrastructure investment," Luxon said in a statement.
"Councils will be required to ring-fence money for water infrastructure and not spend it on other services instead."
National supported greater access for councils to long-term borrowing, he said.
"One way to improve access to borrowing would be for neighbouring councils to form Regional Council Controlled Organisations. Ultimately, it is up to the councils but we would envisage it is likely a number of regional groups will emerge to deliver better water services," Luxon said.
If councils could not come up with clear plans to deliver ongoing investment in water infrastructure, then the government would step in, Luxon said.
Water assets would remain with the communities that paid for them, he said.
The Prime Minister said today he will give the National Party the benefit of the doubt on its plan to replace the Three Waters policy.
Chris Hipkins said he had not had a chance to closely examine National's plans yet.
"My understanding is that they're effectively arguing for the status quo - that's going to result in significantly higher rates for people. I'll give them the benefit of the doubt and have a look at their plan."
A group representing 30 councils said National's plans better protected property rights and the local voice.
Communities 4 Local Democracy said it backed National's aims to retain local ownership.
Waimakariri mayor Dan Gordon said it would be ideal for there to be cross-party support for reform and he was encouraged by the government's recent call to take a fresh look at its model.