Previously, officials were unsure the source would ever be known.
There have been about 60 cases of cryptosporidium confirmed in the area in the past few weeks.
People living in Hanleys Farm, Kelvin Heights and the Frankton flats area can drink straight from the tap again after the drinking water regulator, Taumata Arowai, said on Thursday the council could lift the boil water notice for the area served by the Kelvin Heights plant.
However, the boil water notice is still in force for residents served by the Two Mile plant, which includes Queenstown CBD, Fernhill, and Sunshine Bay.
More to come...