Raetihi's alternative source of drinking water from the Makara Stream started flowing last week.
Ruapehu District Council chief executive and Civil Defence controller Peter Till said that in the longer term the plan is to return to Raetihi's original water source from the Makotuku Stream by Christmas.
"This will be dependent on whether tests show that the stream is free from hydrocarbons and we can safely make potable water from it."
With the clearance from health authorities the council has also withdrawn the emergency drinking water supply.
Mr Till said the phased removal of the drinking water supply services follows the removal of emergency toilets, showers and laundry services earlier. "Emergency drinking water has been supplied in four main ways; self-help water pods around Raetihi streets, door-to-door water bottle deliveries, water tanker deliveries and a stationary water tanker on the main street."