DAMS will be removed and a new water management plan created at Whitehaven's Maules Creek mine site, as part of an undertaking agreed to after the company admitted taking one billion litres of water without a licence to do so.
Earlier this year, the company pleaded guilty to taking the water from the Maules Creek Water Source between July 2016 and June 2019.
It was taken through surface water runoff into dams and other storages, and while Whitehaven admitted to capturing the 1000 megalitres, it maintained it was all accidental.
As a result of the incident significant changes will now be made at the site due to the undertaking, agreed to with the Natural Resources Access Regulator, to ensure it doesn't happen again.
It will now be required to decommission a sediment dam which had captured much of the water, build and operate new highwall dams and re-establish historical, natural drainage lines.
Spokesperson for Lock the Gate Alliance Georgina Woods said the changes should have been made sooner.
"It is outrageous it has taken this long for Whitehaven to be forced to tear down and rebuild its Maules Creek water management system so that the mine complies with the law and its own development approval," she said.
"Astonishingly, the two new diversions Whitehaven is now being forced to construct were part of the original environmental conditions for the Maules Creek coal mine, but were never built."
Ms Woods said she was pleased to see the regulator taking action on the issue, but has criticised the Department of Planning for not acting sooner.
Whitehaven faces up to $2.002 million in fines on top of the undertaking and sentencing will likely take place early next week.
The company was fined $372,500 - its largest ever for mining operations in NSW - earlier this week after pleading guilty to breaching 19 approval conditions at its Narrabri Coal site.
Whitehaven was approached for comment but declined to respond until sentencing was complete.
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