NQ Water has hailed the funding of a third independent water supply as ushering in a new era of development for Townsville and Thuringowa.

The board has met for the first time after the election when the government promised $32.5m to develop the 'missing link' connection from the Burdekin Dam to a water treatment plant south of Townsville.

Chairman Ian Hamilton said while the existing system has served Townsville and Thuringowa well, it was time for another major investment in infrastructure.

"This 'missing link' connection to the Burdekin dam will provide a third independent source of water for the growing centres of Townsville and Thuringowa," Mr Hamilton said.

"The Flinders Highway and Great Northern Railway run through the catchment of and Ross River Dam is exposed to possible contamination if there were a spillage of toxic material.

"We will have surety of supply as a result of this announcement.

"Investment in new infrastructure like this also acts as a catalyst to bring forward developments that would otherwise languish. It offers capacity for both further urban development and confidence for more industrial development. "

The Board directed the NQ Water Chief Executive Officer to take immediate steps to initiate detailed planning of the pipeline, said Mr Hamilton

He expressed the Board's appreciation that the Commonwealth recognised the urgent infrastructure needs of the region.

The Board was told that the announcement was the result of successful consultation and negotiation between the local member for Herbert, Peter Lindsay and the Prime Minister's office.

The $32.5m funding allows for the building of around 15kms of new pipeline worth $15m which will be connected to a new $17.5m Water treatment plant on Townsville's southern outskirts.