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Bringing drinking water in remote parts of Australia in line with national safety guidelines could cost at least $2.2 billion.
A new report by the Water Services Association of Australia found more than 500 Indigenous communities did not have regular water testing.
Some were receiving drinking water with levels of uranium, arsenic, fluoride and nitrate above levels in Australian guidelines.
"We estimate that it will require invest of a minimum of $2.2 billion to bring drinking water in line with the Australian drinking water guidelines - more when you include replacing old pipes and plumbing," said Adam Lovell, the association's executive director.
The report calls for all states and territories to formalise the Australian drinking water guidelines to ensure at least a minimum quality standard is met whether a person lives in Sydney, Shepparton or Yuendumu.
"Ongoing significant investment is needed in both water quality monitoring and an innovation fund to develop new technologies that are resilient to climate change impacts, and ideally integrated with renewable energy and digital communications," the report says.
It also identified blurry lines of accountability and a complex web of agencies involved in the system.
Under the United Nations sustainable development goals, Australia has committed to ensuring the availability and sustainable management of water and sanitation for all.
A number of recent studies, including by the Australian National University and Productivity Commission, have found significant problems with the quality of drinking water in small remote communities.
"There is a widespread collective view from communities, researchers and industry that drinking water in remote communities does not meet the requirements of the Australian drinking water guidelines and a belief in many communities that the water they drink may be affecting their health," the report says.