Chief executive officer (CEO) Michael McMahon reports of "increasing groundwater extraction" due to a reduction in river allocations to 80 per cent of entitlement.

"With water restrictions and reduced entitlement, the Dubbo region has decreased its river water use by 28 to 30 per cent on the same period last year," he said.

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"Dubbo Regional Council plans to negotiate the purchase of additional groundwater entitlements over coming weeks.

"However, the actual purchase can't occur until the next water year 2020/2021."

Dubbo's annual entitlement from the Upper Macquarie alluvial aquifer is 3850 megalitres (ML), of which it has previously used about 2200ML.

Under level four water restrictions, Dubbo would need about 6500ML of groundwater should Burrendong Dam run dry.

The city's yet-to-be-built cross-city pipeline will divert about 500ML of groundwater away from irrigation and send it to the John Gilbert Water Treatment Plant.

Tenders have been called for the signature project in the council's multifaceted response to the water crisis.

The council received $30 million from the state government in June to increase groundwater supplies.