The New South Wales Finance Minister Greg Pearce has asked Sydney Water to explain why it spent seven million dollars on a new website.

The Opposition uncovered the sum after submitting a question on notice.

It says the government initially tried to hide the figure in its response to the question, revealing only that the upgrade represented 4.5 per cent of the corporation's IT budget over the past three years.

Opposition water spokesman Walt Secord says the figure is unjustifiable.

"$7 million when people are facing an average increase of $72 on their water bill," he said.

"Earlier this month we discovered they wasted $1.5 million telling people to drink tap water.

"So this waste and mismanagement under O'Farrell must stop."

The Finance Minister was not available for an interview but his spokeswoman says Greg Pearce agrees the $7 million figure is outrageous and he has sought an explanation.

Sydney Water Managing Director Kevin Young says its previous website was not able to provide its 4.6 million customers with safe, reliable and efficient service.

"After a rigorous tender process, Sydney Water established a new website earlier this year along with other IT capabilities at a cost of $7.1 million, which was 42 per cent lower than quotes received in the tender process," he said in a statement.

"The website actually came in $0.7 million under budget."