Braidwood has downgraded its water restrictions from the highest level after the town received more than 100 millimetres of rainfall earlier this week.
The rain has meant the town should not need water from Icon Water's supply.
In January, the ACT government and Icon Water reached an agreement with the Queanbeyan-Palerang Regional Council that water would be trucked into the town for a period of six months.
The water would come from Queanbeyan's supply, which is managed by Icon Water.
But water from the Queanbeyan supply had not yet started to be trucked into Braidwood, Icon Water general manager of customer engagement Davina McCormick said.
"As per the initial plan [QPRC] had been drawing from Bungendore and were able to sustain Braidwood demand without the need to access our network," she said.
"With water now available in the Shoalhaven River, it is unlikely that additional supply will be needed for Braidwood."
The agreement with Braidwood will remain in place in case dry conditions return.
"The approval remains active if conditions were to deteriorate again within the current agreed timeframe," Ms McCormick said.
"Icon Water will continue to work closely with QPRC to understand the need for this arrangement."
QPRC requested access to the supply after the Shoalhaven River, Braidwood's main source of water, stopped flowing but the recent rainfall had restarted the flow.
"The flowing Shoalhaven River means we can resume pumping to our off-river storage dam in the coming days when the first flush of ash and debris in the river settles," QPRC mayor Tim Overall said.
"With the dam full and the river flowing, Braidwood's water security will be increased and the community will get some relief from the relatively harsh restrictions that have been in place."
The downgraded level three water restrictions will come into place on Friday.
Under the restrictions, the daily usage target for Braidwood is 360 kilolitres.
Residents can water their gardens on alternate days in select hours in the morning and evening. On level four restrictions no watering was permitted.
"We still need further rainfall over an extended period before any further easing of the restrictions," Mr Overall said.