Indigenous elder Robert Clegg earned cheers when he cupped his hands and washed his face with the treated water before a crowd of dignitaries and visiting media at the official opening.

Friday's opening celebrated the completion of a multi-million dollar integrated water cycle management system for the town, Parkes Shire Council general manager Kent Boyd said.

It will deliver two million litres of recycled water a day, currently being connected to irrigation systems to keep local sporting fields and facilities green.

"We've recently built a new water treatment plant and sewage treatment plant ... the advanced recycling plant actually completes this for us," Mr Boyd said.

"This is a very important and very significant project.

"This could not be finished at a more pertinent time, the season's really dried up but this water is a significant amount of water that can be put back into our community now."

Parkes Mayor Ken Keith said the concept was born many years ago, but the timing of its delivery was perfect.

"Having a second use of the same water in our community is a huge cost saving to council and a huge benefit to our community," he said.

Those two million litres of water do not have to be pumped 35km from the Lachlan River and borefields at Forbes.

"The water we use on the sporting fields from the recycled plant means that that potable water's not being used on our sporting fields so that then is available more for the community for their gardens and personal use," Cr Keith said.

Michael McCormack, Deputy Prime Minister, Minister for Infrastructure, Transport and Regional Development and Member for Riverina, said the new pipelines, pumps, pits, valves and a reservoir would relieve the stress on Parkes' water supply.

And that's critical given the predicted growth.

"We've got a lot of growth about to happen in Parkes and we've got to make sure we've got sufficient water to meet the needs of that growth," Cr Keith said.

"This will help in no uncertain terms."

The project has been designed to be as green as possible, with solar-powered pumping and treatment.

The water is stored in a 2.4ML reservoir and irrigation occurs "at night when it's cool and appropriate to do so", the mayor said.

Mr McCormack said he was delighted the National Stronger Regions Fund had recognised the value of the project, funding it to the tune of $8.7 million while the council added $12 million.

"We need to use (water) wisely and use it to its maximum effect, being able to reuse it just makes more sense particularly when we've got a community in drought," Mr McCormack said.

The Parkes project can be used as a model for other communities, he added.