"This huge investment in new infrastructure will ensure we can continue to supply safe and good-tasting drinking water to all our customers, even as the expansion of Melbourne's urban growth boundary leads to a big boost in population," Western Water's managing director, John Wilkinson, said.

The organisation's plan includes spending $11million in Hume, including additional tank storage and an upgrade at the Sunbury recycled water plant.

"In recent years we have focused on upgrading infrastructure in Sunbury, and now it is Melton's turn," Mr Wilkinson said.

Major projects in Sunbury in the past 10 years have included $10million on a pipeline connecting Sunbury to the Melbourne water supply, another $11million spent on upgrading the Sunbury recycled water plant, $3.2million on the Sunbury-Melton recycled water pipeline and more than $1million on replacing water mains.

"Under the [new] plan, we are assuming drought conditions will remain unchanged and we will continue to source about 95per cent of our water from the Melbourne supply," Mr Wilkinson said.

"Despite good rain in the first half of this year, we will also be continuing our emphasis on water conservation, with programs such as our shower-head exchange and free trigger nozzles.

"Our customers are already among the lowest water users in the state and we are urging people to continue with their water-saving efforts at home and at work."

He said recycled water would become an increasingly important resource over time as the region's population increased. Western Water is aiming to recycle 100per cent of water by 2013.

Recycled water is already piped across the region for watering sports grounds and parks, as well as irrigating vineyards and orchards.