A $920,000 Federal Government grant for the construction of thermal baths and associated amenities will improve tourism outcomes as well as increase community amenity and resilience.

Federal Member for Parkes Mark Coulton said he was thrilled Walgett Shire Council would be able to make this long-awaited project a reality.

He joined Minister for Resources and Water Keith Pitt, Walgett Shire Mayor Ian Woodcock OAM and councillor Kelly Smith to visit the site of the exciting project on Monday.

"The northern part of my electorate is already home to a number of hot artesian bore baths which draw thousands of tourists each year, and now Collarenebri will be another key stop on the Great Artesian Drive," Mr Coulton said.

"This will be a game-changer for the small Basin town, boosting tourism and economic development which will have positive flow-on effects for the whole community.

"Each of the projects that have been successful so far under round three will help communities by using local suppliers and resources as well as through local knowledge to drive the best outcomes for our region."

Cr Woodcock said this project was about revitalising the Collarenebri economy through tourism and building a resilient business community.

"I am absolutely delighted that funding has been approved for the construction of the bore bath at Collarenebri," Cr Woodcock said.

"Campers and locals alike will have the best of both worlds available to them, being able to soak in a mineral bath after a hard day of fishing on the mighty Barwon River."

Cr Smith said this was his proudest moment as a councillor, having fought for this project for the past 13 years.

"This is the biggest and best thing; this bore bath will be life for Collarenebri," Cr Smith said.

"Since the water buyback scheme, Collarenebri has become a ghost town. This will change that; it will put us on the map."

The bore bath will be located at the Collarenebri primitive camping area adjacent to the sportsground on the Gwydir Highway.

Water from the bore bath will be pumped onto the sportsground and adjacent park, in line with the Council's water management plans.

Minister Pitt said the Economic Development Program recognised that local communities knew how best to tackle the challenges they faced, and what kinds of activity would support people in their own areas.

"It was great to day to be able to get out on the ground and see firsthand how these economic grants will be able to improve communities like Collarenebri for the better," Mr Pitt said.

"The Collarenebri Bore Bath is a perfect example of a project that will create new jobs, increase the capacity of communities like Collarenebri by diversifying and strengthening the local economy.

"Across the Basin, people have been dealing with the biggest water reform in Australia's history along with drought, demographic change and commodity price change.

"This funding recognises the pressures that many people in the Basin's rural and regional communities are under, and seeks to create new economic activity and job opportunities for impacted communities."

The Collarenebri Bore Bath project is one of 16 local projects awarded a grant under the third round of the Coalition Government's Economic Development Program.

Close to $39 million of funding has already been approved under rounds one and two of the program for a huge array of activities throughout Murray-Darling Basin communities.