Data collected by the International Water Management Institute (IWMI) found that 85% of cities discharged the water without any appropriate treatment.
With many developing nations swiftly urbanising, the authors said people were at increasing risk of disease. The findings are being presented at an international water summit in Sweden.
'As the world flips over from a predominantly rural to a predominantly urban population base, cities are going to take more and more water for agriculture,' explained IWMI director general Colin Chartres.
'However, most of the water going into urban areas comes out the other end in the sewers,' he told BBC News. 'We know that there is an informal sector within many cities that is using [wastewater] to grow vegetables, but there has been no data on how much of this water was being used or what the risks were.'
Waste not, want not The study, based on case studies from 53 cities in developing nations, examined where wastewater was being generated, how much was being used in urban agriculture, and to what degree the water was being treated.
With increasing food prices and growing concerns about water scarcity, the authors of the report highlighted a number of benefits of using wastewater to irrigate crops.
They said that it allowed food production in places where there was a lack of water, or where no alternative clean water sources were available.
It also recycled nutrients, meaning that farmers did not have to buy expensive fertilisers. And irrigating farmland with wastewater also has environmental benefits, explained Dr Chartres.
'It is a pretty useful way of treating water in the sense that if the water just went straight into a river, it would cause a lot more eutrophication problems further downstream. 'So in a way it is performing an ecological service by cleaning up some of the water and recycling the nutrients.' Samples of wastewater taken at regular intervals from a river in India, showing how the water gets cleaner as it flows through natural wetlands However, Dr Chartres warned that using wastewater for irrigation was not risk free, especially as the world became more urbanised.
'If this practice is going to be increasingly commonplace and more and more people are going to be eating food produced this way, then there needs to be a bit more concern about the heavy metals and other contaminants in there.
'Ideally, the end product should be treating the water to a standard that means there is no risk, but most developing nations cannot afford to do this.
'Apparently, what happens now in areas with very polluted water is that the farmers do a smell test or a taste test,' he added.