Water Resources Minister Ernie Bridge has lifted the stringent water restrictions imposed on Wyndham following a good January rainfall in the area.
Mr Bridge praised Wyndham residents for their understanding and co-operation during the restrictions.
"People showed great restraint during a difficult time and I am pleased to say that the Moochalabra Dam is close to overflowing and everybody's lives can return to normal," Mr Bridge said.
He said everything possible was being done to prevent the situation from occurring again and stressed that the circumstances which led up to the restrictions were unusual.
"Wyndham recorded the lowest ever January and February rainfall during the 1991/92 wet season and in the end water restrictions were the only short-term answer to the problem."
Mr Bridge said the new pipeline from the King River along Moochalabra Creek was complete and water pumping began on January 11.
"Because of the rain, pumping has stopped, but in future the pipeline will keep Moochalabra topped up before the dry season starts."
The Wyndham Water Supply Scheme Review, which includes an assessment of current operating strategies and alternatives for future water supplies, is due to be completed in early February.
"The short and long-term alternatives being worked on by the Water Authority of WA include a pipeline option which would bring water from the Ord River to Wyndham," Mr Bridge said.