The report, released to coincide with last week's release of the Murray-Darling Basin Authority's Guide to the Basin Plan, says the proposed sustainable water diversion limits (SDLs) alone would cut the gross value of irrigated agricultural production (GVIAP) in the basin by $939 million, or 15.1pc.

But when additional buy-backs and infrastructure works are factored in, GVIAP would drop by $630m, or 10.1 per cent.

However, the report notes small towns dependent on irrigation, particularly for rice and cotton, could be "significantly" affected.

The report was prepared by ABARE - BRS (Australian Bureau of Agricultural and Resource Economics - Bureau of Rural Sciences).

It takes into account the basin plan's 3500 gigalitre SDL option, and the $3.1 billion water entitlement purchase and the $4.4 billion infrastructure program under the Water for the Future program.

It says the Water for the Future program would bring forward some of the reduction in irrigation activity that would otherwise have occurred at the time of introduction of SDLs (2014-15 in NSW and 2018-19 in Victoria).

The regions facing the largest dollar value in reductions in GVIAP are likely to be the Murrumbidgee, Murray, Namoi, Gwyder and Barwon-Darling in NSW, the Condamine in Queensland and the Victorian Murray and Goulburn-Broken.

The report also says the basin plan and government actions will have flow-on effects for regional economies dependent on irrigation.

"In the absence of other policies, it is estimated the basin plan will reduce gross regional production in the Murray-Darling Basin by 1.3pc."

The Riverina and north-east Victoria would be the most affected, and northern NSW the least affected.

However, the drop is likely to be only 0.7pc by 2018-19 when government water buy-backs and the Water for the Future program are taken into account.

The report takes a relatively optimistic view of the overall impact on employment in the basin, suggesting a marginal 0.1pc increase.

It says this will come about from the economic stimulus of Water for the Future and water buy-backs to bridge the gap to the SDLs.

"Changes in employment are estimated to be much smaller than changes on gross regional production ... because in the longer term labour can move from agriculture to other sectors."