Gundagai has a very high standard reticulated drinking water supply from the Murrumbidgee River. The water is treated by a modern Water Filtration Plant built in 1990. The system has 6 reservoirs and a maximum capacity of 5 megalitres per day. Water is supplied to all homes and businesses within the town area.
The new water billing pay for use system was introduced in 2003.
Council encourages water saving measures and puts water restrictions in place when necessary.