MELBOURNE is to remain on stage 3A water restrictions, but households will be asked to cut their overall water consumption.
"Target 155 combined with stage 3A water restrictions will achieve similar savings to stage 4 while offering the community greater flexibility on how to achieve the target," Victorian Premier John Brumby said.
Melbourne's water storages are at 33.3 per cent capacity compared to 40.2 per cent at the same time last year.
Monday's announcement means limited outdoor water use can continue, including restricted watering of gardens and sports grounds.
It's a saviour for the nursery and car wash industries, which would have been crippled by tough stage 4 water restrictions.
But the government has warned that if water targets aren't met, mandatory targets or stage 4 bans may be introduced.
Target 155 starts next Monday and 3A restrictions will be periodically reviewed, Mr Brumby said.
Melburnians use an average of 165 litres of water a day, peaking at 180 litres during summer.
Mr Brumby said the campaign was about education, not enforcement and would be backed up by a $5.4 million advertising campaign.
"It's not our intention to have penalties, this is really setting a target and we hope that Melburnians, all of them, will play a part in achieving this target.
"I've got great confidence in Victorians, in Melburnians, I'll think you'll see people participate in this.
"I think it's achievable and I think the bulk of people will do it."
Mr Brumby said the best way for households to cut their water use was by shortening showers from seven minutes to four minutes and installing a water-efficient shower head and washing machine.
AAP