Walcha Shire Council says it will stop charging the 25 per cent fee on domestic water deliveries when 50 per cent or more of the Shire experiences extremely low rainfall relative to historical records for six months.
Mayor Janelle Archdale says the new policy will take affect immediately.
Council formerly stopped charging the fee based on drought declarations, which no longer occur.
Mayor Archdale says Council will use the data from monthly Seasonal Conditions Reports issued by the state government.
"Straight away we're going to drop the 25 per cent on water deliveries and the trigger that we're going to use is that it has to be extremely low rainfall relative to historical records for the preceding six months," she said.
"So, we are in that situation with over 50 per cent of Walcha shire is now [in that situation] so we're definitely going to implement the waiver immediately."
Mayor Archdale also warns higher level water restrictions are not far away for ratepayers in the Walcha local government area.
"We're actually jumping the sprinkler for two hours in the afternoon and two hours in the morning," she said.
"We're jumping that step and going straight to hand-held hoses because we believe it is dry enough to warrant not allowing sprinklers at all."
© ABC 2013
16:51 EST An East Coast Low should form off the New South Wales coast this Monday, bringing heavy showers, strong winds and dangerous surf to much of the coast.