The Queensland town of Stanthorpe has run out of water, leading to the largest water carting project by a local government in Australia.

The main water supply for the town of more than 5,000 people in southern Queensland is it a critical level amid severe and ongoing drought conditions.

Residents now rely entirely on trucked water.

With a daily requirement of 1.3 million litres, 14 vehicles are carting 42 truckloads of water from Connolly Dam near Warwick to Stanthorpe's Storm King Dam, in a 130-kilometre round trip.

Residents are on emergency water restrictions of 80 litres of water per person, per day.

The emergency water costs $800,000 a month, funded by the Queensland Government.

But with the backup supply set to run out by August, and no big rains in sight, the whole Southern Downs shire may soon be looking for a new supply.

The shire is in discussions with the state about access to the Dalrymple and Cunningham alluvium – large underground water sources north of Stanthorpe.

Mayor Tracy Dobie said the State Government has backed the council’s investigations into the bores.

Authorities want to drill up to six new water bores and run a feasibility study into a pipeline connection between the Southern Downs and the Toowoomba Regional Council water supply.