Authorities announced on Tuesday that restrictions would be reduced from level two to level one, as dam levels jumped to 80 percent as a result of the record rainfall.
The move defies the expectations of authorities and weather forecasters, who were predicting no significant rainfall for this part of the year, and planned instead to tighten water restrictions for an undetermined period.
"We recently experienced the biggest rain event in 20 years, which has impacted the quality of raw water in Greater Sydney's bushfire affected catchment," New South Wales Minister for Water, Property and Housing Melinda Pavey said.
Sydney's dams went from under 50 percent capacity and falling, to over 80 percent, largely from rainfall over the weekend of Feb. 8-9, during which time up to 400 millimeters fell across the city.
There remains some concern that the rain may have washed ash and other debris from the recent bushfire disaster into the catchment area, causing contamination, with officials closely monitoring water quality.
"A number of initiatives are in place to ensure the water is safe for use, including extensive testing, filtration and nets to catch debris, but we are allowing an extra two weeks purely as a precautionary measure," Pavey said.
Under the level one restrictions residents are still required to attach trigger nozzles to hose when washing cars or property and limit the use of sprinkler systems, with those who don't facing heavy fines.