New funding means residents of Euchareena in New South Wales will no longer pay thousands of dollars a year to truck water into their town.

Dubbo Regional Council has begun carting water to Euchareena after obtaining funding from the State Government as part of a $15-million package in the most recent budget.

Euchareena has not been connected to the council water supply for close to a century. Instead, it has obtained its supplies from a private dam.

With that dam having run dry months ago, locals were paying hundreds of dollars a month in some cases for supplie to drink and bathe in.

The council's Director of Infrastructure, Julian Geddes, says residents are now entitled to 100 litres per person, per day.

“Their restriction is probably a little bit more than what the current household would be on in Dubbo,” he said.

The funding allocation will last for less than a year, leaving many hoping that the drought will break in coming months.

“If it's clear that drought conditions haven't been relieved, then council would look to extend that program or talk to DPI,” Mr Geddes said.

The State Government is also funding water carting to Pooncarie, a town of around 40 people on the Darling River, which is on emergency supplies due to a lack of inflows into the Menindee Lakes.

Locals are fundraising for a bore to be built in Euchareena while the drought persists, and the council had applied to re-establish the town's bore licence.