The forward osmosis - reverse osmosis (FO-RO) system, which has been installed thanks to $136,800 of funding from the NSW government, will be in place for around three months and the water it produces will be used by local meat processing plants.

Between 90 to 95 per cent of the waste water is turned into potable water - or drinking water - which is about 30 per cent higher than traditional RO treatments.

Around 8000 litres a day will be treated, but that will have the capacity to grow to 16 megalitres per day in Tamworth.

The CSIRO began setting up the system at the start of the year, and have been sending teams down to help operate it.

Due to FO requiring less energy, the project is also expected to save money in the long run.

Member for Tamworth Kevin Anderson believes the region is at 'the forefront' when it comes to looking at water security and ways to improve usage.

"All data that will be available from this futuristic time machine behind us here will be made available to the state so it can be beneficial to communities right across NSW," he said at a press conference on Thursday morning.

He also stated local companies were extremely excited about the potential for water and costs to be saved through the trial.

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Legislation prevents treated wastewater from being used as potable water, but Mr Anderson said he would personally have no issue with drinking it, even stating he had before and that it tasted cleaner than regular water.

Tamworth Regional Council (TRC) mayor, Col Murray, is keen to see the town host such an innovative project.

"Our region knows deeply the importance of effectively using every drop of water available," he said.

"To have out plant chosen as a pilot trial site is a privilege and is another clear demonstration of how Tamworth is an emerging leader in innovation."

Aside from operational costs, the project will be cost neutral for TRC after the initial investment they put in last year was matched by the NSW government.

The CSIRO are helping run the program alongside Hunter H20, who will act as the trial facilitator and technical advisor.

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