The level one restrictions were in place for properties around Lake Hayes, including Bendemeer, Threepwood, Slopehill Road, and Arrowtown-Lake Hayes Road, after significant and sustained demand.
Strong demand led to the area's water take limits being consistently breached earlier this month.
Council infrastructure operations manager Simon Mason said water consumption was now back within permitted limits.
"But we haven't seen the end of this hot and dry summer weather, so using water wisely will help to avoid the potential need for restrictions in future," Mason said.
"One way we can all help save water at home is to use timers on sprinklers and irrigation sprinklers, and to only water gardens, plants, and lawns between midnight and 6am, when demand is at its lowest and water isn't lost to evaporation."
The council would continue to monitor water usage, and offered water saving tips on its website.
