Canberra's water supplies for the next 30 years have been secured by the Murray-Darling Basin management plan signed into law on Thursday by the Commonwealth, the ACT government says.
The deal will also see $85 million in federal money flow to the territory to help clean up local waterways including Lake Burley Griffin.
Speaking at the National Press Club on Thursday, Water Minister Tony Burke said Australia had been waiting for the reform since Federation.
''In my view Australia has been putting this off for more than a century, that needs to end, that ends today,'' Mr Burke said.
''Today, under the Gillard government, Australia, a century late, but hopefully just in time, has its first Murray-Darling Basin plan.
''Today is the day Australia decided to restore the Murray-Darling to health.''
The process to deliver the new basin plan was first started under the former Howard government and has taken five years to come to fruition.
The plan will recover 2750 billion litres of water from farmers and irrigators for the environment by 2019.
Almost $10 billion will be spent on more efficient irrigation infrastructure, pumping and piping projects on wetlands and floodplains, and buybacks of water entitlements from farmers.
A separate bill, which passed the Senate this week, allows the government to spend another $1.8 billion by 2024 to try to recover an additional 450 billion litres for the river through water savings from on-farm infrastructure upgrades.
ACT Water Minister Simon Corbell said on Thursday that the allocation to the territory of 44.5 gigalitres meant the city had secured enough water to support a population of 450,000, which could be reached as early as 2040.
The local government had fought hard against an earlier proposal from the Murray-Darling Basin Commission to limit the territory's allocation to just 29 gigalitres, which would have been a ''real issue'' for the territory's long-term water supply, according to the minister.
''Overall this plan is good news for the territory because it confirms our allocation of 44.5 gigalitres under the sustainable diversion limits,'' Mr Corbell said.
''It [the management plan] gives us the water security we need … and this has been the number-one objective for me as minister, to make sure we get the water security we need for our growing city, the largest urban settlement in the Murray-Darling Basin.''
The territory has spent hundreds of millions of dollars on water security projects in the past five years in an effort to drought-proof Canberra, including the $405 million Cotter Dam extension and the $155 million Murrumbidgee to Googong pipeline.
Mr Corbell also welcomed the restoration of an $85 million Commonwealth grant to be spent on cleaning up local catchments.
The territory missed out on the money last year, originally earmarked for a big desalination plant, after the project failed to stack up.
The territory Labor government has committed to an expensive clean-up of Lake Burley Griffin and its catchment as part of its parliamentary agreement with the ACT Greens, but Mr Corbell said the money would not all be spent on the iconic waterway.
''The fact that up to $85 million is now available to us for catchment management purposes will mean we can tackle, in a very significant way, the water quality issues we're experiencing in the catchment.
''Not just in areas like Lake Burley Griffin, although it will certainly be captured by this, but also the broader catchment throughout the territory including the Murrumbidgee River.''
Meanwhile, the plan still has hurdles to clear. It does not need to pass Parliament but may have to survive a disallowance motion.
The Greens say the amount of water proposed to be returned to the river is scientifically insufficient to ensure the river's health. But the Coalition has strongly hinted it is unlikely to vote to bring down the plan.
An inter-governmental agreement with state governments on how the plan will be put in place also needs to be signed.
State governments want extra compensation over the next decade to cover the costs of putting the plan in place. NSW has also demanded a cap on water buybacks in the state be included in the plan, which has not occurred. The NSW government has threatened to legislate its own cap if it does not get its way.