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At present the Kakanui water supply does not meet new national drinking standards and does not have water treatment facilities, but the Waitaki District Council has resolved to solve the problem by connecting the Oamaru and Kakanui water supplies by pipeline.
Cr Jim Hopkins said the decision to link the two water supplies was ''the best solution and the most cost-effective''.
Although the decision would add an extra $7 a year to rates in Oamaru, there had been no opposition to the idea, Cr Hopkins said.
''No-one from Oamaru has said that we don't want this.
''I'd like to think that it reflects that the community has seen the wider sense of good,'' Cr Hopkins said.
A recent survey of residents in Kakanui garnered 93% support in favour of the township being connected to the Oamaru water and waste-water network.
Council assets manager Neil Jorgensen said 156 Kakanui residents had been surveyed and 145 had supported the idea of connecting to the Oamaru supply.
Mr Jorgensen added that a public meeting, held last week, had also indicated strong support for the idea.
Coast Cafe and Restaurant owner Richard Collins said the decision would make a big difference to his business and other small businesses in Kakanui.
''We filter our own water but we still have an issue with the taste, no matter how much it is filtered. We are really happy about this; it will certainly make a difference to the quality of product we can offer customers.''