About 3,5 million people could be exposed to cancer in the Ethekwini region and some parts of Pietermaritzburg.
This is after KwaZulu-Natal MEC for agriculture and environmental affairs Mtholephi Mthimkhulu after studies showed elevated levels of mercury in streams around Durban.
But the deparment has called on communities not to panic
The mercury levels were detected in some samples of soil, vegetables and fish in the eThekwini municipality.
Mercury is a heavy silvery-white toxic liquid that can cause cancer. It is often a by-product of a manufacturing process.
Khulekani Ntshangase, spokesman for the department, said mercury was deadly.
"We have not yet established where it is coming from. We know that it is formed by chemical waste," he said.
The studies were conducted by the Medical Research Council after an investigation into human exposure to mercury in KwaZulu-Natal.
The study showed a high concentration of mercury in areas around Inanda Dam.
Mthimkhulu said people should not panic as preliminary findings indicated that the water was safe for human consumption.
He also urged people to cooperate with the government to address the problem.
"We will do everything necessary to protect people from contracting viruses," he said.
He said although the quality analysis of potable water in the areas was lower than the World Health Organisation's threshold values, the threat did not pose any risk to public health.
Mthimkhulu said the preliminary findings had prompted various questions regarding the extent of the problem.
"In response, a technical task team made up by the [national] Department of Water Affairs and Forestry, eThekwini municipality and uMngeni Water was set up to find a suitable management of the situation," said Mthimkhulu.
Mthimkhulu said the task team commissioned a sampling of the area and the results seemed to confirm high levels of mercury.
The scope of the emergency response was extended to include Inanda Dam (which supplies drinking water to Durban) and surrounding rivers - uMngeni, Msunduzi and Mngcweni - Wiggins Waterworks and Nagle Dam," he said.