The Legislature passed a sweeping package of policies and a massive bond measure that together represent the most significant breakthrough on water management in nearly 50 years.
But amid celebration in the Capitol, there was broad recognition that steep challenges loom before California can recover from years of paralysis over how to improve water supply, distribution and conservation.
Chief among the hurdles: Voters next fall will have to approve about $11 billion in bonds to fund a range of projects, including reservoirs and unproven environmental protection programs.
Nevertheless, Gov. Arnold Schwarzenegger hailed the moment.
"This is the best investment in the future for California anyone can make," Schwarzenegger said.
Schwarzenegger expressed confidence that voters understand the consequences of not putting money into fixing the state's aging water-supply network.
Of the roughly $11 billion total, $3 billion would be set aside for building new reservoirs.