The Biden administration has reached a landmark deal with states dependent on the Colorado River to conserve water amid the decadeslong drought.
The three Colorado River lower basin states -- California, Nevada and Arizona -- will be required to conserve an unprecedented 3 million-acre-feet of water through 2026, the White House announced in a press release Monday.
The deal is voluntary among the states and will prevent the need for federal intervention to mandate cuts. Representatives from the seven Colorado River Basin states have agreed to the conservation proposal, according to the White House.
The vast amount of water conservation will take place in exchange for about $1 billion in federal funding.
Last month, the U.S. Bureau of Reclamation proposed a plan to cut water allotments to states to combat dwindling water levels along the Colorado River. It gave the seven Colorado River states the options of no intervention -- allowing the states to come to their own agreement; cutting the amount of water released from the Glen Canyon Dam based on water rights -- with California being the priority; or water cuts spread evenly among the states.
The Interior Department is temporarilywithdrawingthe proposal published last month in light of the states' voluntary conservation proposal, the White House said.
The Colorado River Basin supplies drinking water to 40 million people in the U.S., as well as two states in Mexico, fuels hydropower resources in eight states and remains a crucial resource for 30 tribal nations as well as agriculture communities across the West, according to the Bureau of Reclamation.
The proposal comes with a decadeslong megadrought reducing water levels in the Colorado River, Lake Mead and Lake Powell -- the two largest reservoirs in the world -- to record-low levels.
The federal government aims to build long-term system efficiency and prevent the Colorado River system's reservoirs from falling to critically low elevations that would threaten water deliveries and power production, according to the White House.
Officials commended seven basin states for demonstrating leadership to achieve the substantial water conservation.
"Today's announcement is a testament to the Biden-Harris administration's commitment to working with states, Tribes and communities throughout the West to find consensus solutions in the face of climate change and sustained drought," Interior Secretary Deb Haaland said in a statement.
The Interior Department has pledged about $1 billion in funding for Colorado River states, including $281 million for 21 water recycling projects, up to $233 million in water conservation funding for the Gila River Indian Community, more than $73 million for infrastructure repairs on water delivery systems, $71 million for 32 drought resiliency projects to expand access to water through groundwater storage, rainwater harvesting, aquifer recharge and water treatment and $20 million in new small surface and groundwater storage investments.
ABC News' Stephanie Ebbs contributed to this report.