A 270km pipeline from the Murray River is set to be built to help residents in the far west NSW town of Broken Hill deal with water supply problems.
The pipeline is part of a $500 million package being released in next week's budget, NSW Premier Mike Baird has announced.
"Water security has been a constant challenge for Broken Hill since it was founded in 1883," Mr Baird said.
"This unprecedented investment will provide a reliable water source for the historic township and surrounding communities for the first time in history."
Broken Hill currently receives its water supply from the nearby Menindee Lakes system.
That system had experienced record low inflows in the last decade and the Darling River has also been notoriously unreliable, Minister for Water Niall Blair said on Thursday.
"This pipeline means the Menindee Lakes can be managed more efficiently to balance the need for productive water and the importance of the lakes for the local community," he said.
But Greens MP Jeremy Buckingham urged the government to revive the Darling River, arguing the "panic pipeline" would not solve the water crisis.
"Implement policies to ensure surface water flows down the Darling from small and medium rain events rather than having all the water taken by irrigators in southern Queensland and NSW," he said.
The government should also work to make the Menindee Lakes water system more efficient, he said.
The final structure of the project - set to built early next year and completed by late 2018 - will be determined in the near future, Mr Baird said.
The community will be asked to contribute to the cost of the project and any rate increases will be introduced very gradually, he said.
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