The Federation of Saskatchewan Indian Nations says the act does not guarantee access to safe drinking water.
It says the act transfers the burden of water regulation to band councils that have limited capacity or resources to meet standards.
Federation vice-chief Kimberly Jonathan says First Nations water treatment plants can only deal with certain types and levels of contamination and there will come a point when the water is untreatable.
Jonathan also says there isn't any money from Ottawa for reserves to improve water systems.
The bill was introduced in February 2012 and passed third reading in the House of Commons on Monday.
Unsafe drinking water on reserves has been the subject of many reports and recommendations. A 2011 government-commissioned report on First Nations water and waste-water treatment showed that 39 per cent of reserves had water at high risk of being unsafe and 34 per cent of reserves had supplies at medium risk.
The report estimated that bringing reserve water systems up to federal standards would cost about $1.2 billion. Maintaining them at that standard would cost $4.7 billion over 10 years.