With three times the storage of the town's older reservoirs, it will act as a fail-safe should something go wrong with the Scone to Murrurundi water pipeline, which was finished last year.

Between 2016 and 2019 things got so bad for the town that water had to be carted in on trucks, at an exorbitant cost.

Locals had even started calling it 'Murrurundry' and 'the town with no water'.

Families were forced to go days without showers and limit flushing their toilets, as taps ran as dry as the rain clouds.

The problem was the drought, but many in the community felt it was exacerbated by a lack of forward planning by the government.

But Minister for Water Melinda Pavey, who was joined by Upper Hunter MP Dave Layzell for the announcement, said residents should now have confidence the right infrastructure is in place to tackle droughts.

"For 18 months during that terrible drought we were carting water to this community, that was a big cost on ratepayers as well as the state government subsidising that," she said.

"The best solution to solve that problem was a pipeline from Scone to Murrurundi, but we then also needed a better capacity in terms of the reservoir here to store that water, and it's now got three times the storage capacity.

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"We don't want to see the water trucks back, we are planning for future droughts and we are giving security to our communities across NSW."

But Ms Pavey did admit there was no guarantee Murrurundi would never be left without water again, and said inland rural communities are ultimately at the mercy of mother nature.

Mayor Maurice Collison said council has been focusing heavily on water infrastructure throughout the region, so the horrors of 2016 to 2019 are not repeated.

"As a farmer myself I went through that with carting water for stock and washing and drinking," he said.

"It was certainly a challenge and I think people here certainly appreciate how easy it is to turn a tap on without thinking, and I'm sure everyone now realises it's not that simple and everything comes at a cost."

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