Minister for Climate Change and Water, Senator Penny Wong, made the announcement in Griffith with Parliamentary Secretary for Water, Dr Mike Kelly.
'Australia faces major challenges in securing our water supplies in the face of a drying climate and rising demand for water,' Senator Wong said.
'The Rudd Government is working to meet these challenges through our $12.9 billion Water for the Future Program. Key priorities under Water for the Future are taking action on climate change, securing our water supplies, using water wisely and supporting healthy rivers.
'As reduced water availability increases pressure on both surface water and groundwater resources, we need better information on how much water Australia's groundwater systems can provide.
'This knowledge is crucial to helping us plan and make decisions about our water resources.'
The project will investigate how climate change is expected to affect rainfall, along with water losses through evaporation and water use by plants. It will then determine the impact of these factors on groundwater recharge and base flows to water systems at a regional level.
Dr Kelly said the project would build upon the sustainable yields work undertaken by the CSIRO in the Murray-Darling Basin, Northern Australia, South West Western Australia and Tasmania.
'Importantly, the investigations in the Murray-Darling Basin will provide up-to-date information to assist the Murray-Darling Basin Authority in its preparation of the new Basin Plan,' Dr Kelly said.
To be implemented from 2011, the Basin Plan will include a new, scientifically-based, sustainable limit on the use of both surface water and groundwater in the Basin.
The project announced today was initiated by the National Water Commission to help integrate climate change adaptation into groundwater planning and management. More information is available at http://www.nwc.gov.au
Funding was provided under the National Groundwater Action Plan, which is investing in projects to improve groundwater knowledge and guide reforms agreed to under the National Water Initiative.