The funding comes after almost a year supplying water to the town by truck, as well as strict water restrictions for all residents.
The potable water pipeline is likely to provide a long-term water solution running from Gracemere to the north of Mount Morgan.
Next steps will involve a detailed design process for the project before construction on the new pipeline can begin.
“What this does is bring certainty to those residents in Mount Morgan and we look forward to seeing it come to life in the near future as I am sure they will too,” said Water Councillor Donna Kirkland.
With the funding confirmed, it will still take time for the pipeline to be completed.
“This project will take around two years to build but with the funding in place, we can now progress with it and deliver a solution once and for all for this town who absolutely deserves it,” said Divisional Councillor Cherie Rutherford.
“Today is a real turning point for securing a long term water supply to the town,” Rutherford said.
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