The council used the geophysical data to target potential groundwater sources in the valley, which lies between the Manuherikia Valley and the Maniototo Plain, and then did some exploratory drilling to prove the existence of water able to be used domestically and for stock.
The valley is one of the most water-short areas in Otago, with a mean rainfall of 500mm and only 12% of this estimated to infiltrate beyond the soil.
Groundwater resource scientist Scott Wilson said in a report to Wednesday's ORC natural resources committee meeting all of the area's surface water sources were allocated and storage reservoirs were tightly rationed.
As there might be less stock water available in the future as farmers used more efficient irrigation systems, access to any ground-water resources could provide water when surface water was scarce, he said.
Four exploratory bores were drilled in the Moa Creek area in the southeastern corner of Poolburn and all indicated they could provide at least domestic and stock water supply, he said.
The data and the model developed by staff for the valley situation could be used to discover ground water in other areas in the region, he said.
Cr Bryan Scott said the discovery of water in the valley was very exciting news.
"It justifies our initial contribution to the aerial geophysical data and will lead to more efficient water use, which is great."
Cr Shepherd said while the information would be valuable to residents, it did not provide a guarantee of finding water when a bore was put down.
Chief executive Graeme Martin said the council was responsible for allocating the water from any bores put down as a result of this information being made public.
"There is nothing to stop anybody coming in and applying for a consent to put down a bore and then seek consent to take the water."
However, he hoped people would be "community minded" about the information,"It's a big ... question for the community to address."
Cr Gerry Eckhoff said that while the fact no commercial quantities of water were found would disappoint some, the community needed to face the reality that it would need to introduce water "one way or another" for the valley to reach its potential.
"It's sad, but is as most of us suspected, but I suspect this clarifies the issue."
The council reports on the issue would be made available to the Manuherikia Catchment Water Strategy Group.
