Mitiamo has secured funding for a 375km-long water pipeline after a decade of campaigning.
The Victorian government has committed $10.2 million to the project, which already had the financial backing of landowners and the federal government.
Residents in the area have previously had to rely on dams, Mitiamo Reticulated Water Supply Committee chair Neil Allen said.
"It will also mean we will be nearly doubling the area with access to water. During dry times this project will make a huge difference," he said.
"For cropping purposes the clean and reliable supply will see a reduction in chemical usage bringing with it benefits to the environment.
"There are also great water savings attached to this project and it will mean we don't have open channels running all through the countryside meaning we will be using water more efficiently."
Currently, over 80 per cent of the water delivered for stock and irrigation through open channels is lost to evaporation. The channels do not cover a third of the area the new pipeline will service.
The $29 million project will be delivered by Goulburn-Murray Water.
The new pipeline will provide a year-round service to 180 customers and 87 rural houses through 376 tapping points with delivery of approximately 528 ML of piped domestic and stock water per year, GW Water project director Daniel Arnold.
"Addressing these problems will produce significant benefits to the local and broader community," he said.
"Provision of a more reliable service and a cleaner water supply is expected to result in increased productivity of the land, improved community resilience and liveability, improve terrestrial biodiversity of Terrick Terrick National Park and improved high value use of water."
Construction is expected to start early next year with the final pipeline proposed to supply 75,000 hectares north of Bendigo and south west of Echuca near the townships of Mitiamo, Tennyson and Dingee.
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