The merger of two major water bodies promises to "ensure the highest quality and most efficient service to customers across NSW", the state government says.
The Sydney Catchment Authority will merge with the State Water Corporation to provide more efficient catchment protection and bulk water provision, Primary Industries Minister Katrina Hodgkinson announced on Tuesday.
"This is about a merger of two equals into a modern and responsive service provider for the NSW bulk water sector," she said in a statement.
"By uniting water quality, dam management, flood mitigation and catchment management skills and expertise, this new stronger organisation will ensure the highest quality and most efficient service to customers across NSW."
Ms Hodgkinson said the creation of Bulk Water NSW was not about budget savings but about focusing on efficiently transporting water, providing certainty for food production and ensuring healthy drinking water.
She said the merging of the two authorities should take up to 18 months and an interim common board and CEO would operate during that time under inaugural chairman Terry Charlton.