The Independent Pricing and Regulatory Tribunal (IPART) confirmed its pricing structure for the utility this week, delivering a model with a water cost that depends on overall storage levels in a bid to give customers incentives to save water.

If storage levels sit above 60 per cent the price will sit at $2.46 per kilolitre, while in times of lower dam levels the price would rise to $2.90 from July 1 onwards.

Hunter Water has welcomed the IPART's final determination of prices, with customers to benefit from lower bills over the next four years and increased investment in the region's water and wastewater infrastructure.

Managing Director Darren Cleary said the new prices will help ease pressure on households and businesses during a time of economic uncertainty, with the typical household bill to fall by 3.6 per cent.

"Our customers will have more control over their bills than ever before, with an increased portion of their bill coming from usage charges, rather than fixed charges," Mr Cleary said.

"This provides an additional incentive for our customers to love water, with the majority of the typical household's water bill to come from their water usage charge of $2.46 per thousand litres. Fixed charges will fall by 76 per cent to $24 per year, or just over $8 per bill.

"Separately, Hunter Water continues to provide support to customers who have been financially impacted as a result of COVID-19, and will continue to do so during this challenging time."

IPART's determination also provides a clear direction for Hunter Water's significant capital infrastructure works, with the green light given to its $653 million program, an increase of 31 per cent compared to the spend over the past four years.

"Over the next four years this will include major water and wastewater network upgrades, a continued focus on water conservation and leakage reduction initiatives, and additional funding for water recycling infrastructure and stormwater naturalisation works," Mr Cleary said.

Meanwhile IPART has approved the introduction of a drought price for the first time. This would see the cost of water increase to $2.90 per thousand litres after water storages drop below 60 per cent total capacity.

"While there's a low chance of this price being applied, it would provide a strong additional incentive for Lower Hunter residents to save water during periods of severe drought."