Tamworth has six extra months of water before the taps run dry after 'urgent' environmental approval for use of the emergency Chaffey Dam pipeline.
Friday's environment approval will allow water to be diverted from the Peel River down the pipeline, saving up to 50 per cent of water transferred for town use.
Commonwealth Environment Minister Sussan Ley said she had made the decision a week early, reflecting the "urgency of this decision".
"Tamworth is still experiencing the effects of drought, with levels in Chaffey Dam falling to 14 per cent as a result of three of the driest years on record in the region," she said.
The Environment Minister said she had assessed the environmental impact and imposed a number of conditions to provide protection for those species and their habitat.
Without the pipeline, assuming no new inflows from rain, the Peel River was expected to cease to flow in early 2021, she said.
Despite what Federal politicians call the urgency of the situation, weekly environmental water releases ordered by the state government continue.
Member for New England Barnaby Joyce said he was glad the approval had been finalised.
He said the decision reflects the importance of managing water in the interests of the people who drink it.