The number of waterbirds that call the eastern third of Australia home has dropped to the second lowest level on record, sounding alarm bells for the health of the wider ecosystem as drought conditions take hold.

The annual aerial survey of waterways and wetlands by the University of New South Wales' Centre for Ecosystem Science found the total wetland area studied was the smallest documented, with 60 per cent of wetlands in the survey area dry. The number of breeding waterbirds was also the lowest recorded.

2015 was the first time researchers photographed the Winton Wetlands, near Wangaratta, dry. Credit:Richard Kingsford

"Waterbirds are the canary in the coalmine for the ecosystem because they track all of the processes and organisms that are difficult to track at a large scale," said Richard Kingsford, project leader and director of the Centre for Ecosystem Science.

Collectively waterbirds interact with all levels of the ecosystem. Pelicans and cormorants catch fish while herons prefer frogs and smaller fish. Small wading birds such as the sharp-tailed sandpiper opt for further down the foodchain, targeting microscopic invertebrates while swans and coots graze largely on aquatic vegetation.