More than 1200 assembly boxes located near water outlets containing brass valves will have to be replaced with stainless steel before Perth's new Children's Hospital can officially open.
The $1.2 billion hospital was supposed to open in 2015 but ongoing compliance issues which have led to cost blowouts have delayed the opening until 2018.
WA Health Minister, Roger Cook, said it is unlikely the hospital will open this year.
"It is with great disappointment, given the work that now needs to be undertaken, the hospital will not open this year, however, we are on a clear path forward to rectify this issue," he said.
"I believe it will be early 2018 but obviously we have to be sure that the chief health officer is satisfied.”
Cook said rectifying the brass fittings problem was the responsibility of the builder, John Holland, adding that there should be no additional cost to the government.
In a report by the State's chief health officer Tarun Weeramanthri, said the fittings were found to have corroded, leaching lead into the water system.
The report recommended the fittings, contained in 1,200 mixing valve assembly boxes, be removed and replaced.
The report said the problem is "most likely widespread throughout the building" and called on the builder, John Holland, to remedy the situation.
John Holland is yet to officially comment, with a spokeswoman saying it was still assessing the report.
The report blamed contract management failures during the construction phase for the ongoing problems.
In addition to the brass valves the hospital has been plagued by other issues including asbestos in roofing panels and damage to hundreds of decorative panels on the building's facade.