Environmentalists say it is tougher than they expected. The State Water Agency is warning the public to expect water shortages.
The estuary of the delta acts as a giant funnel and delivers water to about 25 million Californians.
At issue was a judge's order for the federal government to come up with a permit to protect tiny fish called Delta Smelt. Monday was the deadline.
The most controversial aspect of the new permit by the U.S. Fish and Wildlife Service authorizes the release of more water from reservoirs some years to reduce salinity in the delta.
The agency hopes this will improve the habitat for Delta Smelt which are threatened with extinction.
A federal judge ordered the agency to re-write the permit after throwing out the old one, saying it was not strict enough to save the smelt.
Environmentalists like Barry Nelson say the new plan appears to be stronger than what the judge wants.
"The record levels of pumping we've seen in recent years in the delta has had a major effect, not just on this one fish, but the whole assemblage of fisheries and the health of the ecosystems as a whole," said Barry Nelson with the Department of Natural Resources.
The State Department of Water Resources says releasing more water into the delta may not leave enough water for homes and farmers. Water districts may lose an average of 20 to 30 percent of their supply.
In a statement released Monday the agency said in a worst case scenario, "State water project deliveries throughout California could be permanently reduced by up to 50 percent."
The Santa Clara Valley Water District says its reserves are already drying up.
"We've had two dry years. So, we asked our customers to cut back their water use by 10 percent. So, we've had to rely on conservation and we're also getting less water from the delta. So, it's been a double whammy for us," said Susan Siravo with the Santa Clara Valley Water District.
Dr. James Cloern with the U.S. Geological Survey is an expert on Bay Area ecosystems. He says the water pumps are an easy fix.
The other problems are harder to address.
"Toxic contaminants, diversions of water, habitat transformations, introductions of invasive species... All of these factors are playing a role," he said.
State officials say if the drought continues the new permit guidelines will contain what it calls, "severe reductions" in dry years when water is needed most.
Environmentalists countered by saying things like conservation, wastewater recycling and using groundwater can meet the public's needs as those cuts are made.