The contaminant cryptosporidium has been found in water supplies in Clonmel Co Tipperary.
Around 4,500 households are to receive hand-delivered notices this morning warning them to boil water.
The parasite, which has left thousands of households in Galway without drinking water since March, was found in the Glenary water supply that serves most of the Clonmel's 11,500 inhabitants.
The source of the contamination may be sheep and wild animal droppings which entered the water supply following recent heavy rains, The Irish times reports this morning.
The unusually high level of cryptosporidium was confirmed by tests carried out by the Health Service Executive. Clonmel Borough Council met in emergency session last evening to discuss the results.
Fine Gael's South Tipperary TD Tom Hayes said a temporary water supply for the town must be identified urgently.
"Water tankers should be stationed around the town so that residents and businesses have access to safe water and disruption is minimised until this hazard is tackled.
"The tardy response to the same problem in Galway earlier this year is still fresh in everyone's mind and that cannot be allowed to happen in this case," Mr Hayes said.
The warning is expected to remain in place for a minimum of six weeks, as works to upgrade the Glenary treatment plant are expected to take four to five weeks to complete.
There have been no reports of related illness in the town to date.