A pre-feasibility study has been completed for the project, which would soon progress to a concept design.

Mount Isa Water Board chief executive Stephen Farrelly said the pre-feasibility study showed the project would be viable and would generate a net cost saving for customers.

"The project is still in its infancy and, as is appropriate for such a substantial investment, it will need to progress through a series of approvals before a final investment decision can be made," Mr Farrelly said.

Mount Isa mayor Joyce McCulloch said the project could have great benefits for the remote town.

"There is the obvious water security and reduced costs of pumping from Lake Julius, but it would also mean greater year-round recreation access for Lake Moondarra if the region can use water from Julius for a similar cost," she said.