The ACT will provide Braidwood with water for the next six months, as the town's water supply has been ravaged by bushfires and dry conditions in the region.
Icon Water and the ACT government approved a request from the Queanbeyan-Palerang Regional Council for access to the water supply.
It has been agreed that water would be sourced on a commercial basis from Queanbeyan's supply, which is administered by Icon Water.
The agreement would be managed under existing water supply arrangements between QPRC and Icon Water.
The ACT would deliver 250 to 300 kilolitres of water per day, which is the equivalent of two minutes of water supply to residents in Canberra and Queanbeyan, Icon Water said.
The average target for water usage in Braidwood is 280 kilolitres per day.
Braidwood is currently on level four water restrictions - the highest measure in the Queanbeyan-Palerang local government area.
The level four restrictions were enforced last Friday as the town could no longer pump water from the Shoalhaven River. Off-river storage is the only water available for town use.
The off-river dam west of Braidwood, on the corner of Sandholes Road and Reservoir Lane, is at about 82 per cent capacity and is reducing at a rate of about 1 per cent every two to three days.
Watering of council-owned parks and gardens has ceased under the upgraded restrictions.
Farmers are able to obtain 1000 litres of potable water per day from a drought tap at Bicentennial Park.
Water restrictions in Braidwood have been escalated rapidly over the past two months.
Braidwood had level two water restrictions applied in November. It was the first time the town had restrictions since 2010.
In December, at the height of the North Black Range fire, the restrictions were upgraded to level three. At the time, Queanbeyan-Palerang mayor Tim Overall said if dry conditions persisted water would run out in the first few months of 2020.
Water delivered to Braidwood would not impact on Canberra's water supply, the ACT government said.
Canberra is a generous community and I think it is a good thing we are able to provide short-term water relief to Braidwood to assist them through this difficult period.Andrew Barr
The amount of water to be delivered to Braidwood over the six month period is less than a one day supply for Canberra and Queanbeyan.
Icon Water puts the consumption of its water supply in Canberra and Queanbeyan at 214 megalitres. Currently dam levels in the ACT sit at 46.5 per cent.
ACT Chief Minister Andrew Barr is set to visit to town on Friday to make the announcement.
"Canberra is a generous community and I think it is a good thing we are able to provide short-term water relief to Braidwood to assist them through this difficult period," Mr Barr said.
"It is important that a long-term solution to this issue is identified."
The ACT does not have any water restrictions in place at present, Icon Water managing director Ray Hezkial said increased storage capacity meant restrictions were not needed.
But Mr Hezkial said Icon Water was seeing increased consumption patterns and they were monitoring this closely.
There have been permanent water conservation measures in place in the ACT since 2010.