THE $2 billion desalination plant at Kurnell will be shut down this weekend and is likely to remain closed for at least three years.
Finance Minister Greg Pearce said the plant's two-year proving period ended on June 15.
It was due to have been turned off at that point and not restarted until dam levels fell below 70 per cent.
But the shutdown was postponed until Sunday to allow minor maintenance.
Sydney dams were at a total storage capacity of 96.4 per cent at the end of last week, with Woronora Dam at 87.7 per cent.
Mr Pearce said the government was pleased the plant was not needed at present and savings could be passed back to customers.
"With the plant not operating, we'll be saving $50 million a year in payments to the plant operator, while having the insurance of a backup water supply if needed," he said.
Mr Pearce said the government would gain $2.3 billion through a long-term lease of the plant, which would repay the debt and provide a further $300 million for infrastructure projects.
Greens MP John Kaye, who forecast long ago the plant would be a "white elephant", said it would be at least three years, but more likely a decade, before the plant was switched back on.
"It will cost NSW taxpayers $20 million a month for every year it sits idle," he said.
Dr Kaye said that instead of leasing the plant, the government should shut it down, sell off the membranes while they were still valuable and mothball the plant.
Is the desalination plant a ‘‘white elephant’’ or sensible insurance?
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