Queenstown's cryptosporidium outbreak has 60 confirmed cases and a boil water notice has been in place since last month.
The Queenstown Lakes District Council plans to isolate the Kelvin Heights water treatment plant, which would allow the boil water notice to be lifted for those on that supply including Frankton, Kelvin Heights, Quail Rise and Hanley's Farm.
The council's records suggest more than 3600 residents in Frankton alone would be impacted by the change, which does not include visitors in the area.
Its property and infrastructure general manager Tony Avery said the council has provided an updated drinking water safety plan and isolation plan for the plant to water services regulator, Taumata Arowai.
"We began flushing the supply from Kelvin Heights yesterday morning in addition to continued monitoring and sampling. Initial results after flushing should be back on Wednesday," Avery said.
"Assuming the results are clear, in line with our expectations, we will then be in a position to agree ending the boil water notice for those residents and businesses served by this particular local supply."
The boil water notice would remain in place for all other affected parts of Queenstown and everyone in the district should maintain good hand hygiene to minimise the risk of the gastro bug spreading, he said.
"There has been a massive effort from council staff and contractors to get to this point. I would like to thank everyone involved as we continue our work to meet the requirements of Taumata Arowai's order.
"We will keep updating the community about when we expect to lift the boil water notice for everyone."
No variation of the compliance order was required at this stage, he said.
Last week, the council confirmed it has secured UV disinfection equipment to provide a temporary barrier against cryptosporidium at the Two Mile plant, with a current installation timeframe of 8 December.
