It's official: the commonwealth has taken charge of Australia's largest river system as it battles a crippling drought.
The Senate passed laws on Thursday allowing a federal takeover of the Murray-Darling Basin.
It was the last hurdle in the historic takeover.
The basin states - Victoria, NSW, South Australia, and Queensland - have already passed laws handing over certain water powers to the commonwealth.
Since 1901 the states have been in charge of the basin, which is home to 61,000 farms and is the country's largest irrigated food bowl.
But a protracted drought, combined with the systematic over-allocation of water to irrigators, prompted federal politicians to instigate the takeover.
With the passage of the government's water laws, it's full speed ahead for the $13 billion rescue plan to preserve the basin's dwindling water resources.
A new authority will manage the basin and set caps on how much water can be taken out of its rivers.
The water laws do not prevent the construction of a controversial Victorian pipeline.
Federal Water Minister Penny Wong said the passage of the water laws was a significant step on the road to recovery for the parched basin.
"The approval of these reforms marks a critical change in how Australia's most important river system, the Murray-Darling Basin, is managed," Senator Wong said.
"We will work to meet the challenges faced by the basin, including over-allocation, drought and climate change."
She said the new regime would develop a basin plan, set caps on surface and groundwater extraction, set targets for water quality and salinity management and write rules about water trading.
The federal opposition voted for the water laws but criticised them for not going far enough.
"There are big improvements, big steps forward, (but) we wanted a truly national system," opposition water spokesman Greg Hunt said.
He called on the government to block Victoria's Sugarloaf pipeline, which will take up to 75 billion litres out of the basin each year.
The opposition had tried to amend the laws to block the pipeline, but backed down after the government rejected the amendment in the Senate.
Independent senator Nick Xenophon also took aim at the new system, saying the states still held too much power over the basin.
He called for a "full national takeover of the river system".
Senator Xenophon also slammed the Victorian pipeline and said the new system would take too long to enforce caps on water extraction.
Victoria does not have to enforce its cap until 2019.