Bringing drinking water in remote parts of Australia in line with national safety guidelines could cost at least $2.2 billion.

A new report by the Water Services Association of Australia found more than 500 Indigenous communities did not have regular water testing.

Some were receiving drinking water with levels of uranium, arsenic, fluoride and nitrate above levels in Australian guidelines.

"We estimate that it will require invest of a minimum of $2.2 billion to bring drinking water in line with the Australian drinking water guidelines - more when you include replacing old pipes and plumbing," said Adam Lovell, the association's executive director.

The report calls for all states and territories to formalise the Australian drinking water guidelines to ensure at least a minimum quality standard is met whether a person lives in Sydney, Shepparton or Yuendumu.

"Ongoing significant investment is needed in both water quality monitoring and an innovation fund to develop new technologies that are resilient to climate change impacts, and ideally integrated with renewable energy and digital communications," the report says.