The announcement will ensure people and businesses in the Liverpool Plains Shire will have access to a reliable supply for generations to come, he said.

"Water infrastructure is critical to securing long term investment and economic growth in the New England," Mr Joyce said.

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Liverpool Plains Shire Council Mayor Doug Hawkins said the project would give the community a "point of difference" compared with other local government areas.

"We can lay a really secure foundation for future economic development and growth with a water security trump card like this," he said.

Cr Hawkins said work is expected to begin very soon with laying a pipeline between Qurindi and Werris Creek.

All told, the Commonwealth government will devote $15 million to the project.

On Friday, Mr Joyce announced that the government would fund three other local projects through the Building Better Regions Fund, including $631,000 to upgrade the Inverell Regional Livestock Exchange, $154,710 to implement leadership development programs across rural areas and $71,839 to identify skills shortages and service gaps in regional NSW.

The $32.5 million Quipolly Dam project is the largest infrastructure scheme the Liverpool Plains Shire Council has ever undertaken.

The new treatment plant and pipeline from the dam are key to solving ongoing water quality issues in Werris Creek, which sources its water from the dam.

A 21km two-way automatic pump-driven pipeline will be built between Quipolly Dam and Werris Creek, and between the dam and Quirindi, which will then connect to the existing pipeline from Quirindi to Willow Tree.

The existing pipeline from the dam to Werris Creek is 100 years old.

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