A significant proportion of the total population of Nepal relies on water sources contaminated with Escherichia coli (E. coli). As water stress in highly urbanized regions like Kathmandu Valley is accelerating at an alarming rate, traditional water sources like stone spouts or spring systems can play a vital role in achieving the targets set to meet Sustainable Development Goals; however, these sources are polluted and running dry. While water safety plans have been implemented in various conventional water supply projects in Nepal, through the collaborative efforts of governmental and non-governmental agencies, their applicability in traditional water sources is less explored. This study aimed to identify the status of 20 stone spouts in Lalitpur district of Nepal. The study found that dwindling water yield in highly urbanized regions is likely caused by extensive construction activities in recharge ponds and the over-extraction of water from wells highlighted by the significant change in land use pattern and conspicuous increment in built-up area. The study also found the presence of E. coli in most of the stone spouts with a count as high as 540 CFU/100 ml. To ensure water safety for stone spouts, this paper envisions simple and concise water safety plan guidelines consisting of a six-step procedure to meet the requirements of water users’ committees.