The 13-gigalitre dam, currently sitting at 52 per cent, supplies Armidale and will soon supply Guyra once a $13m pipeline is completed later this year.

Northern Tablelands MP Adam Marshall, who also holds the state's ag portfolio, wants to increase its size to 26 gigalitres.

"We need to really look at raising the dam wall," Mr Marshall said.

"It was built in the '60s with the option to extend the wall by 10 metres, which would double the size of the dam.

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"It seems quite prudent to do so now, so when things do turn around we can capture more stormwater."

Mr Marshall said there was money available for the project. "The government has got $1.5 billion for water security measures in the bush," he said.

"We're heading in to a future of more irregular weather conditions, so it would be prudent to really have a serious look at increasing it.

"Not just for Armidale and Guyra, but potentially for other communities in the region. All of this has to be analysis of course, but if it passes the checks and balances, it could be a regional water supply."

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Armidale Regional Council is planning to truck half a megalitre into Guyra a day, to prevent its dam - currently sitting at 32 per cent - from running dry before the new pipeline is operational, with the cost covered by the NSW government.

"The pipeline will be completed in about August, then there is a month of commission in September before it's full operational," Mr Marshall said.

"If there are no major inflows, Guyra on current usage could run out of water in August."