Access to water is being reduced in western New South Wales in order to preserve supplies for critical needs.

The NSW Department of Industry has announced what water will be made available to farmers, industry and towns for the next year.

General security licence holders, who are primarily irrigators, will receive no new allocation of water in 2019-2020 because of the severity of the drought.

"It's a difficult time for businesses, farmers (and) people relying on water, and these allocations are not good news," the NSW Department of Industry's water drought coordinator, Michael Wrathall said.

The Macquarie River which winds through central NSW is suffering a double blow with no general security allocation, and no chance to use water that was stored in 2018.

"I think people have seen the writing on the wall for a while now," Macquarie River Food and Fibre's executive officer, Grant Tranter said.

"It doesn't make it any less painful; individuals will struggle and I think towns themselves will struggle even more."

Access to high security licences, which are typically held by industry like mines, has also been restricted.

High security licences restricted River system Allocation Lower Darling 30 per cent Peel Valley 50 per cent Macquarie-Cudgegong 70 per cent Upper and Lower Namoi 75 per cent Lachlan 87 per cent Murrumbidgee 95 per cent Murray 97 per cent High security licences are typically held by industries such as mines.

The Department of Industry said it was a necessary but unfortunate decision.

"That's obviously something that we don't want to do but it's something that we've been forced to do given the circumstances that we've got at the moment where there are growing shortfalls with the resource," Mr Wrathall said.

"What we're trying to do is extend supplies for critical needs."

The reduced water allocations will cut production in western NSW.

While the lower surface water allocations had been expected in some river valleys, the decision to cut groundwater allocations has come as a surprise.

Lachlan Valley Water chairman, Tom Green, has expressed concern about reduced access to groundwater. ( ABC News )

On the Lachlan River, access to groundwater is capped at 70 per cent.

"It puts a big hit into confidence," Lachlan Valley Water's chairman, Tom Green said.

"They're (irrigators are) trying to plan and have contracts in place for this summer and the irrigation season ahead and all of a sudden there's going to be less water available."

Mr Green, who will have to revert to dryland farming as a result of the restrictions, said he did not agree with the department's decision.

"They make these blind decisions," he said.

Mr Tranter said the best hope now was for winter rain.

"We hope that some tributary flows turn up and people can get some water, otherwise it will be a long winter and spring," Mr Tranter said.