Christchurch City Council will begin charging households for excess water usage in the coming months.
Residential property owners will pay a fixed rate of $1.35 for every 1000 litres they use over the daily limit of 700 litres - roughly equivalent to 100 toilet flushes.
The city's water usage doubles in summer - and can even quadruple over peak times in the day during the season.
The council's Head of Three Waters, Helen Beaumont, said most of the excess water use is from underground leaks and irrigation.
"One property owner in Avonhead found two leaks that they were not aware of. Since they have had them fixed, their water use has reduced by 42,000 litres a day or 308,000 litres a week," she explained.
Letters have been sent to the city's top water users, ahead of the measures coming into place, to encourage them to check for leaks, Beaumont said.
Other centres around the country saw water use drop by 20 to 30 percent when similar charges were introduced.
Climate change was also a factor behind the introduction of a rate.
"[The scheme's effects] will reduce the energy required for pumping up to reservoirs across the Port Hills. But it will mostly improve the sustainability of Christchurch and Banks Peninsula's water supply," Helen Beaumont detailed.
"In summer, during those very high demand periods, there's a risk of loss of pressure in the network and loss of supply to people. So most of this is about the effective operation of the network and the security of the city's water supply."
The rate will apply year-round to any single household with a water meter installed.
The start date of the scheme is set to be decided in a council meeting on Tuesday.
Commercial properties are already charged for excess usage.