New South Wales will build a 270-kilometer pipeline to bring water from the Murray River to Broken Hill in the state's far west, to solve the town's longstanding water supply problems.

"Broken Hill's future has been secured," said New South Wales Premier Mike Baird.  "Having water is a critical part to any city and a regional city like Broken Hill needs security of water," he added.

For the past five decades, Broken Hill has taken its water from the Menindee Lakes system.  But those have dried up twice in the last ten years, and has therefore proven to be unreliable.  Bore water has not been a popular idea with Broken Hill residents. 

Funding the pipeline will come out of $500 million package that the NSW government set aside from the sale of its electricity infrastructure, and the project will create 240 jobs.

But there are concerns that sticking a straw into the Murray River and drawing out ten gigaliters of water per year could cause problems downstream.

"If it involves depleting and degrading the resources of the river, then obviously it'll be a source of great concern to us," said South Australia Premier Jay Weatherill.  "We're always wary when we hear an upstream Premier talking about the river Murray because, generally speaking, they've spent most of their career depleting and polluting it."