The first pipe has been laid in the NSW government's controversial project to build a desalination plant at Kurnell in Sydney's south.
The pipe put down at Kurnell is the first of 2,000 links that will form an 18km pipeline connecting the plant with Sydney's main water supply tunnel at Erskineville, Sydney Water managing director Kerry Schott said.
The pipe system will cross Botany Bay and go over open and industrial areas, but will tunnel under roads in residential areas.
"The pipeline will deliver 250 million litres of drinking water a day to Sydney Water customers," Dr Schott said in a statement.
"It is large enough to carry 500 million litres a day, should the plant be expanded in the future."
The pipeline will cost $650 million and should be functioning by early 2010, she said.