Farmers in Queensland's drought-declared and bushfire-hit Southern Downs Region say they are devastated the council is allowing a company to take up to 96 million litres of water a year for bottling.

Key points: The water sucked up from groundwater will be trucked to the Gold Coast for bottling

The water sucked up from groundwater will be trucked to the Gold Coast for bottling The water extraction licence was increased to 96 megalitres of water a year in 2010

The water extraction licence was increased to 96 megalitres of water a year in 2010 The licence was extended to automatically renew for nearly a century

The owners of Cherrabah Resort, a four-star rural hotel in Elbow Valley near Warwick, have been approved to install water extraction and purification facilities on their land, which is surrounded by drought-ravaged farming properties.

Residents of the Southern Downs are on severe water restrictions and the council has begun trucking in water to supply Stanthorpe.

However, last month the council approved an application that could see millions of litres of water sucked up from groundwater and trucked to the Gold Coast for bottling.

"It's pretty gut wrenching really and really the timing of it stinks, because we have run out of surface water and we've always relied on springs and creeks," farmer Andrew O'Dea said.

Mr O'Dea said he has just seven cows and one bull left on his property.

His family has farmed cattle in the area for five generations — or about 140 years — but has had to get rid of almost all of his herd due to the drought.

"It's tough, it's always tough because they're breeding stock which you've nurtured over decades," he said.

"There wasn't too many other choices, given the price of hay and feed."

Acting Natural Resources Minister Mark Ryan said Annastacia Palaszczuk's Government understood the landholders' concerns about their water supply.

"I am advised that Southern Downs Regional Council has given conditional approval for groundwater from Cherrabah near Warwick to be used for a bottled water project," he said in a statement.

"The Government understands that the resort operator has committed to not start taking water for bottling during drought.

"They've also offered their allocation to local charities and local irrigators.

"The Department of Natural Resources, Mines and Energy has contacted the resort operator to support them in putting this commitment into action."

Locals angry they weren't notified

Andrew O'Dea, whose family has farmed the land in Elbow Valley says locals assumed the application did not go ahead. ( ABC News: George Roberts )

The owners of Cherrabah Resort, Joyful View Garden Real Estate Development Resort Co., were granted a water allocation in 2008, based on a proposal to develop the area.

The water extraction licence was increased to 96 megalitres of water a year in 2010 and under the Campbell Newman government was then extended to automatically renew for nearly a century, until 2111.

In 2018 the company proposed that it tap the aquifer and truck the water to the Gold Coast for bottling and sale, having scrapped plans to develop the site into a small town.

"We obviously had our strong objections to it which we submitted in due process in 2018," Mr O'Dea said.

He said the council was advised that it should reject the plan and the proposal was withdrawn.

"We assumed at that point it was dead in the water — so to speak … because the council staff, the planning staff, recommended to decline that application on some pretty good grounds."

But, about 12 months later, just before Christmas 2019 an updated version of the proposal was put before council again.

"A lot of things have changed in the last 12 months, given the drought has gone from bad to horrific," Mr O'Dea said.

Council records show locals were angry they weren't notified of the new application.

"Which was really hard to take from our point of view because we didn't get a chance to comment on whatever new information was available," Mr O'Dea said.

'What they do with the water is up to them'

The land in Elbow Valley near Cherrabah Resort has run out of surface water and farmers say they are relying on underground springs and creeks. ( ABC News: George Robert )

Council papers show the decision to accept the proposal was largely based on a report commissioned and paid for by the applicant.

Other property owners said natural springs, that are relied on for cattle to drink from, dried up while the test pumping was being conducted.

Mayor of the Southern Downs Regional Council, Tracy Dobie, defended the company's plan to truck the water away for commercial bottling.

"Right now water is a very emotive topic and a lot of people react to information they hear without understanding how complex the whole water discussion is," Ms Dobie said.

She said, like many other property owners, Cherrabah already had a licence to use groundwater.

"Really what they do with that water is up to them and the State Government," she said.

But the company couldn't do anything with the water without council approving the infrastructure needed to suck it out and purify it.

"Cherrabah applied to council to put in infrastructure that would allow them to take that water off-site," Ms Dobie said.

"In this case Cherrabah has a licence to draw that water and they can either keep that water or they can sell that water and that is no different to any other licence holder.

"Whether you like or don't like the way in which that water has been allocated or not … right now we can only work within the system in which we exist."

The ABC has attempted to contact the owners of Cherrabah Resort for comment.