The New South Wales Government has confirmed Sydney's $2 billion desalination plant will be shutting down at the end of June  following  a two-year proving period.


Finance Minister Greg Pearce has told the ABC it could be around three years before the facility operates again.


He said that the plant will not be recommissioned until the dams drop below 70% capacity, and will then operate until they reach the 80% level.


Mr Pearce said that turning off the desalination plant would save Sydney Water customers $50 million a year, although $16 million was being paid per month to pay for the cost of building the plant and associated pipeline.


Mr Pearce said that while he had been a vocal critic of the plant in opposition but now believed it to be a good safety mechanism in case of drought and useful in planning for Sydney's future growth.