The Otago Regional Council will put $116,500 towards pre-feasibility studies into irrigation development and water management in the Manuherikia and Ida Valleys.
The Manuherikia Catchment Water Strategy Group, an umbrella organisation representing eight irrigation groups, has secured funding from the Government's Irrigation Acceleration Fund for the work.
That funded 50% of the project, so the group sought 25% of the remaining funding from the regional council and will seek the final 25% from the community.
The council had previously supported a catchment-wide approach in the Manuherikia by seeking government funding on behalf of the community from the Community Irrigation Fund.
The irrigation fund contributed 50% and the regional council 50% of the $145,000 initially needed to pull together the hydrology and other related research and form the water strategy group.
Council chief executive Graeme Martin said at this week's council meeting the progress the group had made was "unimaginable 12 months ago".
"It is appropriate the council support this. My only reservation is we have not put money in the past into community publicity and communication."
He also preferred to work with dollar figures than percentages, Mr Martin said.
"They've got a very impressive programme of work ahead looking at dam options, existing facilities, water quality and environmental impacts."
Chairman Stephen Woodhead said there had been some "impressive" progress made and the group had some strong supporters in the community.
"They have some big, brave, exciting things to do - thousands of hectares may be able to be irrigated into the future."
Cr Duncan Butcher said it was amazing how fast things were moving and it was the type of work that if nothing was done immediately, it was still a good investment for the future.
The council agreed to contribute $116,500 for the study from its 2012-13 bulk water fund.
