Kiwis will now be able to feel more confident that their drinking water is safe.
An independent regulator is being established, following the gastro outbreak in Havelock North three years ago.
Mayor Sandra Hazlehurst says it's a much-needed move.
"We'll get a consistency to the New Zealand water supply all across the whole country. We've had a whole focus since the Havelock North water crisis to supply safe drinking water to our community."
In August 2016, about a third of the town's population were struck down with gastro following a campylobacter outbreak. The town's water for a while had to be pumped from Hastings.
- Third death linked to Havelock North gastro outbreak
- Water flows again for gastro-inflicted Havelock North
"New Zealanders have every right to expect clean, safe drinking water," Local Government Minister Nanaia Mahuta said on Friday.
"Unfortunately, over many years, our regulatory regime has not kept pace with international best practice. In addition, enforcement of the existing regulations has become fractured and increasingly ineffective."
Health Minister David Clark blamed the previous National-led Government's "permissive approach to drinking water regulation".
"This Government has learned the lessons from the Havelock North tragedy and we are working to fix the problems exposed by the resulting inquiry."
Hazlehurst says she'd like the new regulator to set up in her town.
"I would like to think that Hasting would be well-positioned to host the standalone agency... why wouldn't we? We've been through a massive time since the Havelock North crisis."
Legislation forming the new agency is expected to pass next year.
"Everyone wants and deserves safe drinking water - it's been a massive focus for us for the last two years. We have invested up to $50 million," said Hazlehurst.