The far-western NSW town has received half its average annual rainfall in the past two months, filling the local reservoirs to overflowing. Figures to be released today show Broken Hill is officially out of drought for the first time since late 2005.

Since the beginning of the year, NSW's drought-declared area has halved from 81 to 39.8 per cent of the state - a 25 per cent reduction from last month and the best result in four years.

Broken Hill's two catchments have not been full since 2002.

''When it came out over the reservoir wall, it's come over so fast it's washed the road away,'' Broken Hill's mayor, Wincen Cuy, said. ''We've had over the last two months nearly half of our average rainfall for the year. It means the property owners can bring their stock back onto their own properties.

''It's green, it's alive, it's fresh.''

Mr Cuy said he flew over western NSW recently.

''From Burke to Wilcannia, it's like a golf course all the way along,'' he said.

Wilcannia, along with Cobar, Dubbo and Goulburn, moved out of drought last month, while Armidale, Coonabarabran, Coonamble, Mudgee, Narrabri, Nyngan, Tamworth and Walgett have been declared satisfactory.

The Primary Industries Minister, Steve Whan, said that although steady rain had fallen in recent months, water storage levels statewide had increased by only 2.3 per cent last month, taking them to 28.2 per cent of capacity.

''This year could certainly be one of the better years for farmers. In January we had more than 81 per cent of the state in drought and that figure has halved,'' he said in a statement.

''Let's hope the downward trend continues.

''The situation has not been this good since March, 2006 - exactly four years ago.''

But parts of NSW's south-east and the Riverina still had poor pastures and needed more rain, he said.

The NSW Farmers Association president, Charles Armstrong, was also cautiously optimistic. ''It's certainly a much better outcome than it was this time last year,'' he said. ''It's not necessarily suggesting that the drought is over, but it's certainly taken a battering.

''There are still some unlucky patches of country. Particularly for those farmers growing wheat - they will still need significant rain in July, August, September to achieve a wheat crop at the end of the year.

Last month, 65.7 per cent of the state was in drought.