TRC's water and waste manager Dan Coe said water was leaking from the 18-megalitre tank at a rate of "about 100 millilitres every second" - which is roughly 8640 litres a day or 60,480 litres a week.

"It's probably less than a household tap running," Mr Coe said.

"Obviously over time this adds up and we are doing everything we can to find the source of the leak.

"We have even had specialist divers go in to the reservoir, but even they were unable to find the leak. The reservoir is structurally sound and the leak is most likely occurring through a rubber membrane between the wall and the floor of the reservoir.

"It is not unusual for this type of leak to occur in water reservoirs and often the leak stops by itself."

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TRC is investigating whether an internal or external repair job would be the most cost effective option.

"If we have to take it offline, we have to empty the whole reservoir and internally do a floor seal," Mr Coe said.

"The other option is an external grout injection. There are a couple of contractors in NSW who do that work, and we've asked them to price that project.

"All the options are quite complex and expensive. It depends on the nature of the repair, but it could be upwards of $50,000."

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Council is expecting contractors to get back to them with estimates in the next two to three weeks, then "it will be up to their time frames".

Three weeks ago, council did some minor earthworks, creating an embankment to contain the flow of water.

The leak was first noticed 12 months ago, however it has only been flowing at a significant rate in the past two months.

TRC is also set to replace the roof of the neighbouring reservoir, after it was damaged during a storm in December.

The job has gone out to tender and a contractor is expected to start repairs by late August.