The warning was issued for South Brook by the province's Environment Department on Monday because of a ruptured dam around a tailings pond at a former copper mine.
Mayor Paul Mills says the municipality is arranging to help deliver the water to residents as it's needed because there are concerns the water released after the rupture could make its way into the town's nearby water supply.
The town's 500 residents are being told they can't use their water for cooking, washing food, brushing teeth or making juices, baby formula and ice.
However, officials said it's safe to use the water, which comes from the South Brook River, for bathing, washing clothes and dishes.
The department said no contaminants have been found in the town's drinking supply.
It did not say when the dam ruptured or what kind of tailings it contains.
The tailings are from the former Gullbridge mine site, which produced copper in the late 1960s and early 1970s, according to the Geological Survey of Canada.
South Brook's water supply is about 20 kilometres downstream from the Gullbridge dam.
The town is on the Trans-Canada Highway, halfway between Deer Lake and Grand Falls-Windsor.
(VOCM, The Canadian Press)