Sources said officers visited the home of Claude Dauphin, borough mayor of Lachine, as well as the residence of Sammy Forcillo, the city's ex-head of water management.
Dauphin was head of the Federation of Canadian Municipalities between June 2013 and last month.
Anti-corruption unit spokeswoman Anne-Frederick Laurence did not confirm the locations searched but added no arrests were expected.
She said 50 officers were involved in the raids.
Montreal awarded a $355-million water meter contract to a consortium in 2007 but cancelled the deal after reports surfaced of alleged embezzlement and other irregularities.
Wednesday's raids were just the latest conducted by anti-corruption officers in connection with the scandal.