NI Water has said it needs £2.5bn to hold off an infrastructure crisis which could hold up housebuilding in places from Limavady to Newry.
The company is responsible for providing clean drinking water and for treating waste water.
But chairman Len O'Hagan said that its waste water infrastructure was "getting ready to burst at the seams" due to under-investment. He said there were already 99 treatment works at locations around Northern Ireland - including Larne, Omagh, Saintfield and Limavady - which were almost at capacity.
Without more investment, he said, another 33 would be at capacity by 2027, and the lack of ability to make sewage connections would hold up housebuilding and other investment.
"No drains means no cranes. It means that we can't accept new connections for new developments - houses, offices, factories, hotels, hospitals or schools. Development will be severely curtailed or completely frozen," he said.
Speaking as NI Water launched its annual report and draft 25-year strategy yesterday, Mr O'Hagan said water treatment in Northern Ireland would be at crisis point by 2027 without investment, with Belfast alone requiring £1bn to upgrade its water treatment works.
In addition, plans for economic regeneration through City Region Deals for Belfast and the north west would also be curtailed.
"If action is not taken, this experience will become the norm in many of our villages, towns and cities," he said.
"The proposed city deals cannot reach fruition without water security and the growth of Belfast city, the prime economic engine of NI, will struggle."
He said the waste water treatment network desperately needed upgrading, but that the company was held back from raising money through borrowing because of its funding model as a government-owned company.
Mr O'Hagan said that avoiding a "crisis" in water treatment "requires a step-change in the level of funding made available to us by government, and that requires a serious public discussion on how we, as a society, fund our indispensable water infrastructure".
"For too long the security of our water infrastructure has been taken for granted," he said.
He called on the Departments for Infrastructure and Finance to make changes to NI Water's model so that it can prepare for future decisions on additional spending.
Mr O'Hagan said that if preparations could be made now, then a future Stormont minister or the Secretary of State could make spending decisions.