Four people were arrested.
The leak occurred last week due to improper loading of the chemical onto a cargo vessel at Shanghai's Jueshi port. Details became available Sunday.
The Xinhua News Agency, quoting local authorities, said workers at the port failed to fully shut off a valve while loading the petrochemical, causing it to spill into the port's waters.
It was not clear how much of the chemical had leaked into the water. The leak was discovered after local residents reported a pungent odor coming from the location.
Xinhua said two local drinking water processing plants had stopped siphoning water from the contaminated area and that police had arrested four people in the incident. The report said three companies were found to have broken regulations pertaining to the sale, transport and loading of the chemical.
The report said 20 vessels were involved in the cleanup effort and experts began studying the environmental impact.
Separately, authorities in southeast Hunan province said more than 20 large sinkholes have appeared in Wenquan village in the past five months, destroying five wells, affecting irrigation of wheat fields and cutting off water supplies to about 4,000 villagers.
The official media carried a number of photographs of the sinkholes.
Local authorities blamed the incidents on over-exploitation of coal in recent years. Remedial measures were under way, authorities said.