Murray-Darling water cap gets green light

A 1500-gigalitre cap will be put on water bought under Murray-Darling Basin contracts, with Labor and crossbenchers backing a government bill.

The bill, which passed the Senate on Monday, will work alongside an estimated $2.5 million a day of government funds being spent on farm pipes and channels to improve water efficiency.

Environment Minister Greg Hunt says Australia's greatest water system will no longer be "over-subscribed and over-taxed".

"We will ensure the water that is saved is shared between the farmers and the rivers," he told reporters in Canberra.

To date, 1164 gigalitres of water has been bought, leaving some headroom before the cap is reached.

Mr Hunt said the plan was on track to achieve 2750 gigalitres being returned by mid 2019 "with the very clear prospect the additional water required can also be achieved".

Parliamentary secretary for the environment Bob Baldwin said there would be benefits for the environment, agriculture, tourism, fishing and Murray-Darling communities.

Asked whether the government's focus was shifting from buybacks to infrastructure, Mr Hunt said a mix of both was needed but the emphasis was on "a re-plumbing of rural Australia rather than a buy-out of rural Australia".