All outdoor water use has been banned in Kaitaia with no significant rain forecast for the next few weeks.
The Far North District Council has imposed level four water restrictions in the region which means water can only be used for drinking, cooking and washing.
Infrastructure and Asset Management general manager Andy Finch said the situation had become critical.
"The Awanui River is the main source of drinking water for Kaitaia.
"Water flows in this waterway have fallen rapidly and to help reduce demand the council applied level three water restrictions to Kaitaia in January," he said.
He said the council was asking residents and businesses to reduce water use by 25 percent.
"With no significant rain forecast, we know many water tanks will soon run dry.
"Town supplies are often used to refill private water tanks, placing an extra burden on our already stretched resources," he said.
Finch said there was little chance of rain in the coming weeks and no significant falls until May or mid-year.
He said anyone who repeatedly flouts the water ban could be fined up to $20,000.
Far North mayor John Carter hopes a complete outdoor water ban will avoid having to bring tankers in.
"We can avoid it, likely can avoid it, if people do their best to reduce their water consumption."
There is little chance of rain in the coming weeks and no significant falls until mid-year, he said.