A general method is proposed to identify appropriate network locations for placing water quality monitoring sensors to identify the sources of accidental or deliberate contaminations. First, the contamination source identification problem is discussed for an assigned set of monitored locations. If the contaminant is conservative or its reaction rate in water is first order, the problem can be expressed as a general under-determined linear system of equations. The set of infinite solutions can be found as the summation of a particular solution and the product of the null-space matrix with an arbitrary parameter vector. Optimal sensor locations are then determined by minimizing the dimension of the null-space for a statistical significant ensemble of contamination events. Simulated annealing is employed to identify these locations.