It has agreed to be the contracting party for the feasibility study phase of the Manuherikia Catchment Water Strategy Group project.
At its meeting this week, the council was told the budget for a full feasibility study was $1.5 million but the Ministry of Primary Industries Irrigation Acceleration Fund was likely to cover half the cost.
The Otago Regional Council had agreed to contribute $175,000 and the six irrigation companies in the catchment - Blackstone Hill, Omakau, Manuherikia, Galloway, Ida Valley and Hawkdun and some private irrigators would fund the balance, district council economic development manager Warwick Hawker said.
The water strategy group was driving the project but had yet to form a legal entity.
The district council was not being asked to contribute financially or provide a loan guarantee.
Mr Hawker said the ''promising options'' to be explored in the study could increase the reliability of water supplies for the current irrigated area and boost the total area of irrigated land from about 15,000ha to 35,000ha.
