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$1 Billion To Build First New Dam In NSW Since 1987

The federal and NSW governments are investing $1 billion in water infrastructure projects for rural and regional communities impacted by the devastating drought in NSW.

"Our response to the ongoing drought impacting rural and regional communities is comprehensive and committed," Prime Minister Scott Morrison said in a statement on Sunday.

"It deals with immediate needs for financial assistance in and longer term investments to build drought resilience for the future," the prime minister said.

He said the 50/50 investment will deliver a $650 million upgrade of Wyangala Dam in the NSW Central West and a $480 million new Dungowan Dam near Tamworth.

This will also free-up NSW funding to allow progress for critical town water projects across the state.

"We want to get these projects underway because this is about water supply and security," Morrison said.

"These projects don't happen overnight but we're working as quickly as possible to get all the necessary work done so we can start digging."

There will also be an initial $24 million 50/50 investment for the proposed 100,000-megalitre Border Rivers project on the Mole River, near the Queensland border.

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NSW Premier Gladys Berejiklan described these announcements as "historic" given the last dam built in NSW was in 1987.

"Dams and other water infrastructure are an important part of the mix when it comes to increasing supply and reliability so that NSW's water supply is more resilient to the terrible drought being experienced across the eastern states," she said in the joint statement.

Much of Australia remains in drought. Image: Getty

However, the Nature Conservation Council has warned the NSW government to retain thorough assessment of water infrastructure projects to avoid further ecological catastrophes, like the mass fish kills earlier this year.

"We need thorough assessment of water infrastructure projects now more than ever to ensure we don't make matters worse," the council's chief executive Chris Gambian said in a statement.

"The problems we are facing today are a direct result of this government refusing to listen to its own planning experts, who warned of this looming water crisis six years ago."