Canberra has agreed to send water to “buy time” for the drought-affected town of Braidwood.

Braidwood is on level four water restrictions and can no longer pump water from the Shoalhaven river, which has stopped flowing.

The town of 1,700 people is in its third year of drought and has had a hard summer, with massive fires burning to its east and west, and the closure of the main highway cutting off tourist thoroughfare.

The town’s mayor has warned that without rain, Braidwood will be waterless within months.

The ACT Government has agreed to extend a 300 kilolitre-a-day lifeline to the town.

“It can't be a forever thing ... but it will help Braidwood out in what's been a difficult time,” ACT chief minister Andrew Barr said.

“[It will] buy them some time either for more rainfall, or for the council and NSW Government to work on a longer-term, permanent solution.

“It is not only the right thing to do, but it reflects our community's values around supporting our region.”

The ACT will truck in 250 to 300 kilolitres per day for up to six months, with transport costs covered by the NSW Government.

Six months’ worth of water for the town is equivalent to just a single day’s worth of water consumption in Canberra.

The ACT has had permanent water restrictions since the Millennium drought, requiring people to water gardens after 6pm or before 9am.

“We are in a position to be able to support [Braidwood] because, and only because, a decade ago we made the decision to significantly expand the capacity of the Cotter Dam,” Mr Barr said.

“[We have] two-and-a-half to three years’ worth of water supply for the needs of Canberra and Queanbeyan if there was no further inflow — if it never rained again, we would have that level of storage.”

Mr Barr said that if the situation worsens for nearby towns, Canberra could be in a position to consider further help.