The Northern Advocate understands the prospective site is owned or co-owned by Whangarei lawyer Wayne Peters.
Mr Peters did not wish to comment on the matter.
The new facility would replace the water treatment plant on the corner of Whau Valley Rd and Fairway Drive, which would otherwise need an immediate $12.75 million upgrade and would be more costly to maintain long-term, WDC water services manager Andrew Venmore said.
Mr Venmore said benefits of building a new plant included being able to meet 100 per cent of earthquake standards rather than 67 per cent, the maximum an upgrade would achieve. There would also be more scope to expand.
A new plant would incorporate current best industry-process design, while moving out of the urban site to a less constrained one would enable safer storage of chemicals and increase accessibility.
WDC spokeswoman Ann Midson said the public would have the opportunity to have input on the proposed project during the planning process. If the project were to go ahead, it is likely the existing plant would be sold.