The study, commissioned by the United States-based Water Research Foundation, says flooding, prolonged rainfall, drought, cyclones and bush fires impact surface water quality. Such weather events, it says, are predicted to become more frequent and intense in many parts of Australia due to climate change.
"We need to focus on building resilience into our future supplies," said Stuart Khan, an associate professor of the school of civil and environmental engineering at the University of New South Wales, and lead author of the report, in a news release.
"This means designing systems that are more protected from the impacts of climate change and that have greater flexibility to respond to extreme weather events. This could be partially brought about through a diversification of water sources."
The report comes as Australia broke another heat wave record, with the temperature in Adelaide, the capital of South Australia, reaching 114.8 degrees Friday. Bush fires raged across the southeast last week, with more than 100 blazes in South Australia, Victoria and New South Wales.
In Queensland, 26 local government areas are now drought declared, covering almost 65 percent of the state.
Bush fires, for example, can cause ash and phosphorus to enter waterways which feed drinking water catchments, while extreme hot weather speeds up the growth of bacteria that can prove harmful to humans.
Although Australian water utilities are "reasonably well prepared to respond to extreme weather events" because of an industry-wide focus on risk assessment and risk management, Khan said, the vulnerability of the country's water systems requires urgent action.
Australia has for the most part avoided potable water emergencies.
Amid heavy flooding last year, Brisbane came close to running out of drinking water when the city's main water treatment plant was knocked out by a huge volume of silt that had washed down from catchments.
"The one thing that saved them was the ability to ramp up water production from the Gold Coast desalination plant at that time," Khan told the Sydney Morning Herald.
The biggest risk to water supply follows a combination of extreme weather events, such as a drought followed by bush fires and then a flood, rather than an extreme but isolated event.
In 2009, Melbourne's water supplies avoided a major threat after massive bush fires because heavy rain did not follow those blazes.
But Hahn warns, "As we see these events happening more frequently, it's likely the impacts will become more severe."