Water in streams, drainage lines and storages requires a high level of protection because it is open to deterioration. In Victoria, statutory authorities and landowners usually share the responsibility for the management of water quality.

To help planners and those managing land developments to determine the suitability of proposed activities within catchment areas, many catchments that supply water for domestic and stock, irrigation or other purposes within Victoria are protected under the Catchment and Land Protection Act 1994. More than 120 catchments are officially recognised by the Victorian Government and are known as Declared Water Supply Catchments (formerly known as Proclaimed Water Supply Catchments).

The Catchment and Land Protection Act allows Declared Special Areas (Water Supply Catchments) to be designated. Special Area Plans specifying where and how various land uses may be undertaken to minimise any adverse effects on the water are then developed for these catchments. Land Use Notices are an interim control measure that may only apply to part of the catchment and are generally used as a temporary measure while a full Special Area Plan is being developed.

Special Area Plans identify drainage lines, streams, spring areas and storages and show the buffer distances to ensure water quality is not compromised by adjacent land uses. If a particular land-use activity is likely to cause deterioration in water quality and a health risk to domestic water supplies, Land Use Conditions may be set under the Catchment and Land Protection Act. These Land Use Conditions are negotiated with the landholder and, once imposed, remain a legal obligation on the landholder until revoked.

As well as the provisions in the Catchment and Land Protection Act, other legislation that affects water quality include the Environmental Protection Act 1970 (pollution control affecting water), the Planning and Environment Act 1987 (statutory planning) and the Land Conservation Act 1972 (land use planning of public land).