NSW Water Minister Melinda Pavey has promised to repay the show of good faith by signing off the plans by the end of the financial year, to allow them be in place for the new water year.

The federal government is still withholding millions in water infrastructure funding from NSW after it missed an extended 10-month deadline at the end of December.

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The then Water Minister David Littleproud told his state counterpart Melinda Pavey that under the Water Act she had two weeks to indicate if NSW was willing to negotiate a new timeline, or he would be forced to take further action.

It was revealed during the Murray Darling Basin Authority (MDBA) senate estimates that Ms Pavey missed the two week deadline by two days.

However, MDBA acting executive director Peta-Joanne Derham said the deadline also coincided with a cabinet reshuffle, with Keith Pitt appointed the new Water Minister.

"Minister Pavey did provide correspondence to Minister Pitt, I think a day or two after the potential due date, the two-week time frame," Dr Derham said.

"She did raise with Minister Pitt not only congratulations for his new appointment, but also a range of matters that NSW currently had running in relation to drought, fire and the submission of the water resource plans.

"It did not specifically address the preliminary notice that was issued but subsequently Minister Pitt has been working with Minister Pavey to find a way to negotiate and settle on a submission date."

Despite the steps outlined in the Water Act, the federal government has not taken further action because "Minister Pitt is continuing to negotiate with Minister Pavey on a submission date, in good faith".

"Time frame of the letter response, as you've rightly pointed out, came and went without a formal direct response," Dr Derham said.

"However, negotiations have continued. It's been a little disjointed because we had a change in minister during that time frame."

Mr Pitt and Ms Pavey both described their discussions as encouraging.

"Those positive discussions should lead to good progress being made and as part of that cooperation current arrangements are being reviewed with regards to funding to NSW," Mr Pitt said.