The Australian Government is funding a business case into the possible construction of a new reservoir that could hold up to 1,350 megalitres of recycled water for South Australia's McLaren Vale district.
If viable, the McLaren Vale Irrigation Water Security project could deliver an estimated 750 megalitres of new water allocations for irrigation in the region, helping businesses grow and supporting jobs.
Upgrades to increase the capacity of the Willunga Basin Water's existing recycled water network will also be considered.
The Australian Government is providing $470,000 toward the $500,000 business case, with the remaining $30,000 coming from the South Australian Government and other partners.
Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Barnaby Joyce said delivering a secure and sustainable water source across these regions would drive the growth of regional communities and industries.
"We are committed to delivering the water infrastructure South Australians need and this moves us closer to getting the job done for the McLaren Vale district," the Deputy Prime Minister said.
"This project could increase economic activity in the region by as much as $100 million and support up to 300 jobs, providing a much-needed economic boost."
South Australian Minister for Primary Industries and Regional Development David Basham welcomed the funding for the business case.
"We know that water is a critical resource for our farmers so they can continue to grow world-class produce, contributing to a strong economy and supporting local jobs," Minister Basham said.
"The business case is another important step towards greater water access in regional South Australia and builds on similar work being undertaken at the Barossa, Eden and Clare valleys and the successful Coolanie Water Scheme which is delivering positive results for farmers on the Eyre Peninsula."
South Australian Minister for Environment and Water David Speirs said ensuring long-term water security for farmers is a priority for the South Australian Government.
"We know that water is one of our most valuable resources which is not only required for critical human needs but it drives economic growth to create jobs as well as supporting a healthy environment," Minister Speirs said.
"We are pleased to be working with the Commonwealth Government as well as industry to deliver solutions."
Senator for South Australia Andrew McLachlan CSC said the Australian Government also has $20 million flowing to a package of 10 construction projects across the state under the National Water Grid Connections pathway, which will together increase water availability by 1,895 megalitres each year.
"This will support around 1,860 hectares of additional irrigable land in the state, bolstering our local production while supporting around 60 construction jobs and 860 ongoing positions," Senator McLachlan said.
"We are also looking forward to the future, by providing $1.8 million to investigate the future construction of new water infrastructure projects in the Eden and Clare valleys.
"Today's announcement is yet another demonstration of our unwavering commitment to invest in the water infrastructure farmers and agricultural producers in South Australia need to access quality, reliable water to grow their business and prosper.
"Water is our most precious resource and the lifeblood of primary producing regions like McLaren Vale and the Clare Valley. It is essential that we continue to invest in innovative projects that improve water access and security and build resilience to drought as a result of climate change."
The detailed business case for the McLaren Vale Irrigation Water Security project will undertake demand studies, network modelling, concept design, site investigations and geotechnical analysis.
The business case is expected to be completed later this year.
