Federal Environment Minister Peter Garrett has given the go-ahead to the controversial north-south pipeline in Victoria, which will pump water from the state's north to Melbourne.
Mr Garrett says securing the water supply for Australia's urban populations is fundamentally important.
He says the Victorian government has said the water will be sourced primarily from savings from the Foodbowl Modernisation Project, which will also go to irrigators and the environment.
The minister says his approval's conditional on an assessment of their water savings' potential impact on matters of national environmental significance and on nationally listed species.
The 70-kilometre pipeline will pump 75 billion litres of water from the Goulburn Valley to Melbourne each year in a move that's angered some irrigators.