Kawerau had previously used UV treatment, which did not provide continuous disinfection of water.
This left the water at risk of being recontaminated by E.coli and other bacteria once it entered the reticulation system.
As a result, Kawerau experienced some low-level E.coli contamination and was not compliant with New Zealand drinking water standards on those occasions.
Council will flush the whole reticulation network and trial cleaning the pipes by air scouring, to resolve the discolouration issue.
It will revisit chlorinating the water supply to meet the drinking water standards, once the discolouration has been solved.
Last week Kawerau mayor Malcolm Campbell said: "The issue is because our water has never been chlorinated before there is a lot of gunk on the pipes that has built up over years".
"The chlorine is stripping it off, which is why it has turned that colour. It is not occurring everywhere, it is sporadic.
"We had the most pristine water in New Zealand, we did not want to have to chlorinate it.
"We were told it could take three to four months for the colour to clear, but it has been much longer and we are not happy about it."