Dubbo Regional Council will consider cutting all water restrictions on Monday night.
The local government area is current on level one restrictions. Under level one, watering is to be attended by a resident at all times or done via a programmable timed system.
The daily target per person each day is 380 litres.
However, with Burrendong Dam currently on 57 per cent, council will consider removing all water restrictions.
"The NSW Department of Primary Industries drought information as reported that 96 per cent of NSW is in the recovery or non-drought category," council's manager water supply and sewerage Stephen Carter said in the report in the report on the issue.
"Based on the information from WaterNSW, DPIE and council's Drought Contingency and Water Emergency Response Plan, this report recommends the lifting of water restrictions throughout the local government area."
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Mr Carter said the Dubbo, Wellington, Geurie and Mumbil communities had "responded to the call to conserve water through the period of extreme water shortage".
"This is confirmed by a significant decrease in daily demand throughout the LGA of approximately 30 per cent since the implementation of level one restrictions compared to the same period in 2018 and 2019," he said.
In July 2020 council eased the water restrictions back to level one, after level three water restrictions had been implemented in October 2019 and then level four in the following November.
Removing the restrictions will be voted on by the councillors at Monday night's meeting.
If they are lifted, Mr Carter said council still needed to maintain a "measured and cautious approach to its current water and drought-management circumstances".
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