The State Council on Wednesday adopted a national plan to protect the safety of underground water resources and avoid pollution.
The State Council ordered local governments to put pollution prevention and underground water control on their working agendas and to set up an underground water environmental supervision system by 2015.
An underground water pollution and prevention mechanism must also be established by 2020 to monitor polluters, improve water quality and guarantee the safety of underground water in key regions.
According to the State Council, 18 percent of China's water supply comes from underground.
In the northern regions, 65 percent of the supply for residential use, half of the supply for industrial use and 33 percent of the supply for agricultural irrigation depends on underground water.
Of 657 cities across the country, more than 400 are using underground water as a major source of drinking water.
Falling levels amid over-exploitation as well as tainting by sewage, household garbage, industrial waste, fertilizers and pesticides have worsened the quality of underground water and caused pollution, according to the State Council.
"Pollution of underground water is more difficult to monitor compared with surface water," Ma Jun, director of the Institute of Public and Environmental Affairs, a non-government organization based in Beijing, told China Daily on Wednesday.
"The North China Plain now suffers more serious pollution in its underground water than any other region in the country. But special monitors on underground water safety now only focus on some major water sources near big cities," he said.
Ma urged the central government to ensure the safety of underground water resources by holding local leaders accountable.
"Many local authorities have not realized the importance of protecting underground water, which is very dangerous to the country's future water supply," he said.