Three reports published by water service regulator Taumata Arowai provided the country's first ever comprehensive overview of drinking water.
They also outlined the challenges confronting the country's wastewater and stormwater networks.
Industry group Water New Zealand said the reports demonstrated communities were still being supplied unsafe drinking water.
The trio of reports also highlighted concerns about high E. coli levels and the high number of long-term consumer advisories, including 'boil water' and 'do not drink' notices, being issued by suppliers.
Water New Zealand technical lead Lesley Smith said up to 489,000 people received drinking water from councils with inadequate protozoa protection and up to 25,000 people received drinking water from supplies without a bacteria barrier.
The lack of a protozoa barrier was identified as a likely factor in the outbreak of cryptosporidiosis in Queenstown last year.
The reports showed areas where the water system needed attention, Smith said.
One report pointed to the gap in the safety of drinking water supplied to many of the country's schools which managed their own water supply, she said.
"It found that 95 percent of schools that have their own water supply need significant infrastructure upgrades, while 87 percent of schools… are not compliant because they have failed to prepare a drinking water safety plan or follow an acceptable solution."
That affected about 45,000 pupils across the country, Smith said.
"All these children ought to be able to drink water from taps and fountains that is knowingly safe to drink. Shining a spotlight on this issue has meant that the Ministry of Education is now taking steps to address this."
Taumata Arowai chief executive Allan Prangnell said it was positive most people did have access to safe drinking water.
Most council-operated supplies had multi-barrier protections in place to prevent widespread illness like E. coli or cryptosporidiosis, he said.
"There is definite room for improvement with around one in five treatment plants servicing council-operated supplies not having all the required protections."
The publication of the reports provided a national picture of public drinking water networks, including all council networks, for the first time ever, he said.
"Without good data, we can't have a good handle on the state of water infrastructure in New Zealand, and it's difficult for operators to plan strategic maintenance or upgrades to ageing networks.
"We are at the start of a journey to collect robust data and improve performance and provide greater public transparency for the benefit of everyone in New Zealand."
A deadline of June 30 this year was set for suppliers without necessary barriers to plan for multi-barrier treatment.
