Central Otago Mayor Malcolm MacPherson is confident a Tarras Water Scheme will become reality soon after the release a year-long study into its feasibility.
The report, commissioned by the Tarras Community Trust, looked at the viability of taking water from the Clutha River to provide irrigation for about 8,000 hectares of land around Tarras.
Mr MacPherson says the plan is technically feasible and fundable.
He says that, with the community supporting the project, it is realistic to suggest the scheme could be operating by 2012.
Mr MacPherson says the study found it will not have a significant impact on the Clutha River or its ecosystems.
Tarras Community Trust chairman Peter Jolly says the current scheme is on borrowed time and the new one would create 124 jobs in the Otago region.
Otago Regional Council chief executive Graeme Martin says most farmers are positive about the proposed scheme, but he admits some are concerned about its cost.
Mr Martin says that in spite of their concerns, most farmers agree that the plan is needed.