The remote Queensland town of Hughenden has launched two schemes to better utilise the region's water.

Hughenden’s population is dwindling, dropping by half since 1961 to just 1,100 people today.

However, it is hoped that the planned $300 million Hughenden Irrigation Project (HIPCo) and the smaller 15 Mile project can create some economic diversification.

HIPCo chair Shane McCarthy says the project is starting with a $10 million business case for a dam, weir and irrigation channels at Saego Station. He says this will help  determine the demand for water.

“In the past 12 months or so there's been lots of interest shown, from Flinders Shire and neighbouring shires, as well as the Murray-Darling Basin area,” he told the ABC.

The scheme's size has been estimated at up to 80,000 megalitres.

“[Consultants] will go into more detail on the design, one of the big things we're going through is how much demand is out there, there's no use building a dam with only a small amount of demand,” Mr McCarthy said.

Separately, Flinders Shire Council has developed the ‘15 Mile’ irrigation project to lure Victorian company Marciano Table Grapes to Hughenden with the promise of underground water supplies.

The company says it will use the new site to fill gaps in the availability of Australian-grown grapes that occur each year.

Marciano has announced it will invest $10 million in developing an initial 60-hectare farm, including a new dam.

Flinders Shire put up $4.5 million for the 15 Mile project, with funds also coming from  Queensland's Department of State Development, which declared the project a ‘coordinated project’ in August 2018.

The state's Jobs and Regional Growth Fund provided some finance too.

Hughenden mayor Jane McNamara says the projects are critical for future investment.

“We had to make sure there was secure water, that's all coming out of alluvial bed sands, as well as a licence for Great Artesian Basin water,” she said.

“It's pivotal to making the world sit up and think; ‘Northern Australia can become a part of the food bowl’.

“This is a pilot project for the HIPCo project. We support that because a dam on the Flinders is going to be beneficial to the whole development of north Queensland.”