Katherine will be the first entire town in Australia to have water restrictions imposed because of contamination from old toxic firefighting foams used at army bases.
Around 11,000 residents will be affected by at least two months of water conservation measures beginning August 21, at a time of peak demand during the NT dry season.
Health Minister Natasha Fyles says limiting irrigation times were an additional precautionary effort to keep the use of groundwater affected by decades-long use of poisonous chemicals at the nearby RAAF Tindal base to a minimum.
"I want to reassure residents that their drinking water is absolutely safe," she said.
Since November, pollutant levels have spiked above the recommended safe health limit four times, but the Gunner government won't reveal by how much.
The federal government also continues to provide alternative drinking water to about 50 Katherine homes, stoking considerable community concern.
The town's water supply comprises 20-30 per cent of groundwater, while the rest comes from the Katherine River.
Ms Fyles said the town relies much more heavily on bore water - which has higher levels of toxins - during September and October at the end of the dry season.
Residents could be affected during this time, as the build up to the wet season approaches, when Katherine's water demand spikes by up to 50 per cent.
The current daily average demand is 10.25 megalitres, which is expected to jump to around 15 megalitres.
No fines or penalties will be issued to residents who flout the new rules, which only permit people to water their gardens three times per week at night.
The Defence Department on Wednesday announced a water treatment plan for the region will be installed towards the end of the year as it explores new water sources.
The small scale interim plant will be capable of treating around one megalitre per day.
The Territory government will review the measures in November, and Housing Minister Gerry McCarthy wants to introduce permanent compulsory restrictions to tackle the issue long term.
Territory government test results last month revealed seafood from two contaminated Darwin creeks are safe to eat.
* Odd numbered properties permitted to irrigate Monday, Wednesday and Saturday from 6pm-8am.
* Even numbered properties permitted to irrigate Tuesday, Thursday and Sunday from 6pm-8am.
* No watering of hard surfaces.
* Handheld watering via a bucket permitted at any time.
