The ruling from the court on Thursday says lax French rules hadn't done enough to keep farm fertilizer from running off into water sources, which could mean millions in fines if France doesn't toughen up its regulations.
According to the court, the heart of the problem is France's failure to follow European Union rules which limit when and how fertilizers, like liquid manure, can be spread on crops.
The purpose of the limits, in place since 1991, is to keep nitrates out of water sources, especially those bound for human consumption.
High nitrate levels in drinking water are particularly dangerous for infants and pregnant mothers, because the contaminant can provoke a potentially fatal condition called "Blue Baby Syndrome."
France must toughen up in areas like the length of the window when nitrates can be used and the quantities of manure allowed to be spread, or face the risk the EU will seek millions in fines.
Advocates for cleaner water in France applauded the court's ruling and urged the government to take action quickly.
"This latest conviction is obviously not a surprise as successive governments have procrastinated and ignored their responsibilities," environmental group Eau & Rivières said in a statement. "It's urgent that we change gears if we want to avoid paying astronomical fines."
France was already found guilty in 2013 of violating European Union rules on nitrate run off and in 2001 for an excessive amount of nitrates in water sources in Brittany in western France.
French officials are well aware they have a problem with their water supply. In fact, consumer watchdog group UFC-Que Choisir recently released a report saying nearly 1.5 million French people drink polluted tap water.
The study revealed by-products of agriculture are the main cause of the contaminated ground water being consumed in France, particularly outside urban areas.
According to the study most substandard water in France is loaded with pesticides and nitrates from fertilizer and livestock manure. That is the case in 63 percent of instances where homes receive polluted water - which represents around 900,000 people.
However pesticides and nitrates are not the only substances polluting French water.
The study also pointed to the presence of selenium, a natural, but toxic, substance that appears when groundwater supplies are over used.