The Waitaki Council is desperately asking Oamaru residents to stop using water as the town's water supply is due to run out by Sunday.
Full water restrictions are now in place for Oamaru, Hampden, Herbert, Weston, Enfield and Moeraki.
Residents have not been properly conserving water and the town is due to run out of its treated supply within one or two days, the Council says.
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If Oamaru does run out of treated water, untreated turbid water will be delivered, forcing residents to boil it before drinking it.
Schools and businesses will likely close if this happens.
"The reservoir is dangerously low and at this stage, we are producing far less water than demand," a spokesperson says.
Waitaki Mayor Gary Kircher told Newshub this is the most extreme water restriction for the township in over a decade.
The council is urging residents not to wash clothes or clean their cars, not to water plants or use dishwashers and to only flush "No 2's".
There is to be no unnecessary water use.
The water restrictions will remain for the next four days in order for the reservoir to reach a manageable water level.
Water has already been turned off to the Kakanui township, Herbert, Hampden and Moeraki areas.