The Opuha dam near Fairlie which generates electricity for the national grid and supplies water to 16,000 hectares of farmland is at just 10 percent of operational capacity.
Opuha Water chief executive Bjorn Triplow said there hasn't been any decent rain since November.
"We have about a week's worth of water left and then we will start moving into natural flows, which is matching inflows into the lake and what we are discharging from the dam itself.
"The lake hasn't been this dry since 2014-2015 so yeah it's not ideal. We need a significant amount of rain to recharge the lake, we haven't had any decent downpours this season at all.
"Fronts that do bring rain are moving too quickly to make much of a difference."
Triplow said irrigation restrictions have been in place for a few weeks but local farmland was looking not "too bad" as farmers have still been able to irrigate at about 50 percent.
"The dam has performed as it was designed to, it's there to deliver sustainable water and environmental flows and it's done that to this point. We would have liked a few more showers to serve the farmers but we just haven't had the recharge of the lake as we normally would."
David Williams, who farms sheep next to the lake, uses the scheme to irrigate a small part of his farm.
"It's pretty barren looking at the lake now - but it's done it's job up until this point.
"Things have really turned in the last three weeks and it's getting pretty dry. We've been holding on to lambs because prices are so low but we are going to have to make some decisions and offload some stock soon."
Williams said they had enough rain on Monday night to wet the concrete but a decent downpour was needed.
"We're starting to look ahead for the winter already, so if it gets too dry now we could be in trouble."
