A Victorian fire-fighter training facility has been shut down and two WorkSafe executives have lost their jobs following the discovery of chemicals in the water supply.

The Victorian Country Fire Authority's (CFA) training facility at Fiskville, north-west of Melbourne, will be closed indefinitely after investigators found fire-fighting chemical residue in the water supply.

The residue was from a chemical known as PFOS - a banned fire-fighting foam. It was discovered in mains water stored in two large tanks at the site.

The facility was already the subject of a state inquiry into claims that fire-fighters were exposed to toxic chemicals during training in the nineteen-seventies.

Now, CFA chief executive Michael Wooten says the “low levels” of contamination have led to a precautionary closure.

“Drinking water is treated by other organisations to make sure it's safe for drinking so we didn't believe the mains water was going to represent a risk to the site, and that's why we hadn't tested it before,” Mr Wooten told the ABC.

The United Firefighters Union says it has been deeply disturbed by the finding, as the substance is “extremely toxic and dangerous”.

The fire-fighters' union banned its members from the site in 2012, but it kept operating regardless. Reports say some non-union officers simply refused to go there.

The state’s safety watchdog - WorkSafe Victoria - had previously declared the Fiskville site to be safe, ignoring repeated concerns raised by fire-fighters and staff.

Following the discovery of the chemical contamination, WorkSafe Victoria chairman chief David Krasnostein and chief executive Denise Cosgrove have quit at the request of the State Government.

“They cannot explain how they got this wrong,” Premier Daniel Andrews said after the sacking.

“In fact they cannot guarantee us that they even tested the water.

“When you’re confronted with that complete inconsistency and people can’t explain to you how it is that they got it so very wrong, either someone hasn’t done their job or someone has been untruthful

“I will not be lied to, and I will not accept incompetence,” Andrews said.

The closure of the site is just the latest in a long history of risk and poor performance.

More than a dozen people linked to the Fiskville site have died of cancer, after being exposed to chemicals through water used in hot fire training exercises.

But a 2012 report declared the facility was safe and the risk of cancer low.

Victoria’s Premier Daniel Andrews said there were “real uncertainties” about the chance of Fiskville reopening.

“People have stood up and said; ‘This is safe’, and the place is not safe,” he said.

“That the water had been tested, that we can confident. Clearly we cannot be confident.

“How could you possibly have confidence?

“This is a dangerous place that has made people sick.

“The families of those who died are entitled to justice and answers.”