Drought-afflicted Guyra will go onto Level 5 water restrictions on Monday, as the dam levels sink towards 20 per cent.
"The move to Level 5 is an emergency measure until the Malpas Dam to Guyra pipeline is completed and operational," mayor Simon Murray said.
Businesses will further reduce water use. The general public will be unaffected, Cr Murray said.
This is the latest measure to secure the town's water supply before it runs out in August.
Council staff will determine restrictions on a case-by-case basis. They will visit businesses that use water, and discuss how they can reduce their water consumption.
Construction and horticultural businesses (including the Costa tomato farm) have already reduced water consumption by more than 60 per cent.
"Council is very conscious that some businesses may have to temporarily stop some activities," Cr Murray said.
These restrictions only affect businesses, and not the wider populace.
"There's no impact on residents," Cr Murray said. "The community won't see any difference. It's purely businesses who will feel it."
Only Guyra, not Armidale, will go onto Level 5. The fear, Cr Murray explained, was that the water quality in the Guyra reservoir would deteriorate, therefore requirements for treating it would increase.
"While there may be 20 per cent there, we may be able only to utilise another five per cent."
The Malpas to Guyra pipeline had been fast-tracked for completion in August. "Pipeline constructors know the situation we're in, and they're going as fast they can," he said.
Council were considering deepening Guyra Dam, and raising the dam wall, Cr Murray said, but getting water to Guyra now was a priority. Water planning staff were focused on maintaining water levels and planning water restrictions.
To deepen the dam, council would also have to deal with copper sulphate used to control blue-green algae. The corrosive chemical, harmful to humans, had settled in the sediment. Council and the NSW Environment Protection Authority were investigating, but Cr Murray did not know when they would be able to act.
In the meantime, SRH Milk Haulage are delivering 26 megalitres of water from Armidale to the Guyra Water Treatment Plant. The state government provided $820,000 to cover the cost, Northern Tablelands MP Adam Marshall announced on Monday.
Council have also contracted a specialist to identify hidden leaks in Guyra's 49 km treated water network.