Water distribution networks (WDN) are vulnerable to either intentional or accidental contamination. In order to protect against such intrusions, effective and efficient online monitoring systems are needed. Due to cost and maintenance reasons, it is not possible to locate sensors at each and every potential intrusion point. In this work, we design minimal sensor networks which satisfy the two important properties of observability (ability to detect an intrusion) and identifiability (ability to identify the point of intrusion). Based on the hydraulic analysis of the network, a bipartite graph is constructed between intrusion points and the corresponding nodes that can potentially be affected by the contaminant. The problem of sensor network design is converted to a minimum set cover problem on the bipartite graph, and is solved using a greedy heuristic algorithm. The proposed method is illustrated using a medium scale urban WDN.