The Brazilian city's decision could result in a legal battle with state utility Cedae.
According to city hall estimates this type of concession will generate US$428mn in gains.
With rain levels falling once again below average in 2018, local firms have stepped up investments to nearly US$150mn during last year to secure water services for the 2019 summer season.
A document related to the ongoing corruption probe shows payments from the Brazilian firm to a company owned by former officials who served in Álvaro Uribe's government.
The country, which has the world's seventh largest uranium reserves, wants to increase research and exploration of the ore through public-private deals.
The Brazilian government pledged to make state-run banks more transparent.
But the governor suggested to sell a portion of the bank's shares via a public offer.