Restrictions were introduced in September when the main water supply at Bamarang Dam reduced to 60 per cent capacity. This week's readings indicate the dam is currently at 98 per cent capacity.

The lifting of restrictions came into place from Monday, December 10.  

Shoalhaven Water Director Carmel Krogh thanked Shoalhaven residents for embracing the water restrictions.

"We are happy to announce that level one water restrictions will be removed from the Shoalhaven in time for Christmas," Mrs Krogh said.

“Shoalhaven Water appreciates how Shoalhaven residents adhered to the water restrictions and reduced their water usage to help conserve our water supply.

"The recent rainfall  improved the dam storages and river flows. We are expecting more rain to further improve the Shoalhaven's water supply.”