A statement from general manager Brad Byrnes on Friday evening said large influx of runoff into the Molong and Borenore Dams after prolonged drought had caused problems with water treatment, potentially making drinking water in the Molong town water supply unsafe.

"Water used for drinking or food preparation should be brought to a rolling boil to make it safe," he said.

"Kettles with automatic shut off switches can do this.

"Water should then be allowed to cool and stored in a clean container with a lid and refrigerated."

My Byrnes said bottled water or cool boiled water should be used for drinking, washing uncooked food, making ice, cleaning teeth, preparing baby formula, gargling and pets' drinking water, with parents advised to send their children to school with their own water.

Meanwhile, unboiled water can be used for washing dishes in hot soapy water or in a dishwasher and allowing it to air dry, washing clothes and showering, taking care to not swallow water.

Parents were told to sponge bath babies and toddlers to prevent them swallowing water.

Mr Byrnes said the council would change the raw water source to an alternative supply but it was expected to take three days for the raw water quality to improve.

The advice to boil water will be lifted once the council and the NSW Health are confident there is no longer a public health concern.

The council has notified hospitals, aged care facilities and schools, in addition to a letterbox drop to residents.

Visual message boards have also been placed on the approaches to the township of Molong advising of the alert.

"Whilst it is highly regrettable to have to take such measures, it is vitally important that the health and safety of our community is our first consideration and this is why Cabonne has acted as quickly as possible," Mr Byrnes said.

"We are confident we can rectify the problem in a relatively short period and will notify consumers as soon as we can when the alert is to be lifted."