"We now have clean drinking water again," a statement on the northern city's Web page said Friday.
The municipality said the problem with the parasite, which left more than 10,000 residents nursing stomach ailments, has been resolved, The Local reported.
"The flushing of the water pipes is completed and Ostersund's mains water is drinkable again," the statement said.
The problems began in November 2010 when more than 2,000 people reported suffering from stomach bugs after drinking tap water, and the city confirmed the intestinal parasite Cryptosporidium had been found in the city's drinking water.
By the time the source of the intestinal parasite was located, more than 11,000 people in the city of just over 43,000 people had reported symptoms.
The city warned some taps that have not been used on a regular basis might need to be run for a while before the water is safe but said the majority of the city's houses and apartments have a clean supply, The Local reported.