Deputy Director-General of the NSW Department of Water, David Harriss, said the continuing drought and record low water availability had led to a substantial increase in the number and volume of temporary water trades occurring in these river valleys.

However, Mr Harris said the conditions meant that in some cases it was physically impossible to deliver water sold between valleys.

Mr Harriss said the rules were necessary to ensure that any water traded could be delivered throughout the year, but not where this would incur unacceptably high transmission losses, and where it would reduce water availability for other users.

"The temporary trade rules are not linked to the embargo on the permanent trade of licensed entitlements announced by the NSW Government earlier this year," Mr Harriss said.

"NSW strongly supports temporary trade of water as this has enabled many businesses under stress to survive."

In 2008-09, more than 7500 trades totalling 930 gigalitres occurred, representing about 49 per cent of the total water available in these valleys.

Much of this volume was traded into Victoria and South Australia.

He said the new rules would apply in the NSW Murray, Murrumbidgee and Lower Darling River Valleys for 2009-2010.

They are:

• Temporary trade from the Lower Darling River to the Murray Valley will not be allowed;
• There will be an interim moratorium on the temporary trade of water from the Murrumbidgee Valley to the Murray Valley, including interstate trades. This will be reviewed if water availability improves; and
• Temporary trade will be allowed from upstream of the Barmah Choke to downstream in the Murray Valley.