Council officials signed an agreement to formalise funding for an $11.5 million upgrade of the pump station and pipeline linking Puddledock Dam to the region's town water network.

The NSW Government committed $5.77 million to the project, following support from the Member for Northern Tablelands, Adam Marshall.

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Armidale Regional Council Mayor Simon Murray said a more robust connection to Puddledock Dam would help to supplement supplies during any future droughts and if there are interruptions to supply from Malpas Dam.

"Monday's signing was another important step to bring greater water security for our region," he said.

Puddledock Dam, constructed in 1928, is Armidale's secondary source of raw water, with a capacity of 700 megalitres. However, its pipeline has a top flow of 5.5 megalitres per day, while Armidale's average demand is 14 megalitres per day in summer and can peak at 20 megalitres per day.

"Its current capacity is barely sufficient to meet Armidale's demand in winter, if the Malpas Dam supply was temporarily shut down because of equipment failure or algal blooms," Cr Murray said.

"This support from the NSW Government will help give us a reliable, year-round back-up so residents and business are not left without water for an extended period if Malpas Dam goes offline.

Council's contribution to the project will be $5.73 million.

Council CEO Susan Law said the necessary improvements would provide an extra three weeks supply if there was an unexpected shut down.

"The management of drought has placed a bit of a burden on our water reserves, but there is sufficient to meet this priority," she said.

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