Water experts are warning an expansion of Sydney’s $2.3 billion desalination plant is likely to take up to two years to complete and lead to higher bills for households.

With the city's dam levels dropping fast, the Berejiklian government has begun the process of fast-tracking a doubling in the size of the plant at Kurnell in Sydney's south.

Sydney's desalination plant will be doubled in size.

The move has sparked demands from Labor, the Greens and independent MPs for the government to protect households from higher water bills to fund the expansion, given it stands to pocket $2.5 billion in dividends from Sydney Water between 2018 and 2021.

"This is money that should have been directed to major water recycling projects, water efficiency and fixing the city's leaking pipes," independent upper house MP Justin Field said.