A New South Wales government agency says it is in uncharted territory regarding management of the state's water supply because of the drought.

Water New South Wales said in previous years it had relied on modelling from past droughts to guide its response to future dry spells.

However, it has never experienced the type of conditions currently affecting the state.

Adrian Langdon from Water NSW said they had taken "exceptional measures" to try to preserve water storages because of record low rainfall and inflows.

"What we are seeing, especially in the last 18 months is some of the lowest inflows on record," Mr Langdon said.

"We haven't seen this type of situation before."

Water NSW has imposed quarantines on water licence holders in the Macquarie Valley. (file photo) ( Reuters: David Gray )

Burrendong Dam near Wellington is sitting at about 10 per cent and is expected to drop to below five per cent this summer.

The dam has been supplemented by a bulk water transfer from the nearby Windamere Dam in the Mudgee district.

Rural news in your inbox? Subscribe for the national headlines of the day.

Water NSW has also had to impose quarantines on water licence holders in the Macquarie Valley who rely on Burrendong Dam.

They have held a meeting with irrigators in the Macquarie Valley to discuss how it will manage the dwindling water supply.

It described the drought in the valley as the worst on record and warned that Burrendong Dam would run dry in March 2020 if there were no significant inflows.

Macquarie Valley irrigator Steward Dentson said many people had significantly scaled back operations.

"It is making the management of our businesses very difficult," Mr Dentson said.

"The flow-on effect to the towns that provide services and inputs to our farm services is a big challenge as well."

Dam size of Sydney Harbour all but dry

It is a similar story in the Gwydir and Namoi catchments in the state's north-west where long stretches of the Namoi River have run dry and Keepit Dam near Gunnedah has dropped to 0.04 per cent.

Minister for Regional Water and Primary Industries Niall Blair visited the dam, which has the capacity to hold nearly as much water as Sydney Harbour, to announce infrastructure to boost oxygen levels of fish amid several kills across the state.

In what has been described by the water authority as a "new drought of record", unrelenting conditions have seen Keepit Dam all but dry up.

A meeting of federal and state water managers and environmental water holders is being held this week. (file photo) ( Reuters: David Gray )

"We are behind the eight ball when we see the types of inflows we should be seeing in a dam like this," Mr Blair said on Tuesday.

The area is usually brimming with sail and speed boats and children making their way out to its recognisable pontoon in the summer months, but it has been reduced to a quagmire.

Valleys of death

In far western NSW, a series of fish kills in the Barwon-Darling River system is attracting national and international attention.

Federal Agriculture and Water Resources Minister David Littleproud said the fish deaths were the result of cool weather which killed off blue-green algae and sucked the oxygen out of the water.

He has organised a meeting of federal and state water managers and environmental water holders this week to discuss the issue.

Water NSW said the greatest concern were the valleys, which are drying up, and meeting the needs of communities, industry, and the environment.