A joint Indo-US study published in American journal SCIENCE revealed the finding.
NASA's Moon Minerology Mapper (M3), one of the payloads on board Chandrayaan made this discovery.
The Rs 386-crore worth craft was launched in Oct 2008.
However, on Sunday, Aug 30 following a communication failure the project was called-off.
Initially neither ISRO nor NASA admitted the existence of water in moon.
A spokesman for Brown University also declined comment, saying there was an embargo.
"It will be a major announcement of a major discovery and is something great for Chandrayaan. It will mark a major leap for India"s space programme," he said.
Even an ISRO official from Sriharikota said that a major announcement was expected on Thursday, Sep 24 but he had not confirmed it.
"I too have heard something to that effect. Nothing more," he said.
Reports said that NSA would confirm the finding later on Thursday, Sep 24.