The federal government is to unveil ambitious plans to find billions of litres of extra water to restore health to the Murray-Darling Basin and appease a disgruntled South Australia.

Prime Minister Julia Gillard will be in the state on Friday, where she is expected to announce the government will put an extra 450 billion litres into the system from 2019.

The extra water will be sourced from farms, where an additional $1.7 billion in government funding will improve infrastructure and water efficiency, so there’s more left over for the environment.

The move has delighted South Australian Premier Jay Weatherill, who has withdrawn his threat of a High Court challenge to the previous plan.

Federal Environment Minister Tony Burke says the Murray-Darling Basin Authority’s (MDBA) draft plan, released in August, just didn’t deliver sufficient ecological benefits to the environment.

“I did believe we could be more ambitious than what the authority was putting forward,” he told ABC radio on Friday.

The commonwealth will push ahead with the authority’s original proposal to recover 2750 gigalitres (GL) per year from irrigators and return the flows to the environment.

But from 2019, an extra 450GL sourced from farm improvements will be added, meaning a total 3200GL – 3200 billion litres – will be given back to the environment every year.

The trade-off is that the deadline for the plan will be extended from 2019 to 2024.

The new approach will target on-farm programs instead of just buying back water from irrigators, a strategy staunchly opposed by many in NSW and Victoria.

Mr Burke said he hoped the announcement would appease irrigators worried their water allocations for farmland would be diverted to the environment.

Opposition water spokesman Barnaby Joyce, who has questioned what impact any plan will have on farming communities, is sceptical about the announcement.

“Where’s the money, that’s what you’ve got to ask,” he told ABC radio.

“If you haven’t got the money then this is just a wonderful idea and if you say a little prayer every night then it might happen.”

Mr Weatherill thanked South Australians, who stood firm in their opposition to the lesser 2750GL flow.

“This is a significant win for South Australia with the federal government committing to that extra water,” he told ABC television.

The benefits for the environment from the extra water would be “massive” and help prevent salinity and acid build up in the Lower Lakes, he said.

Of the extra funding, $200 million will be used to remove river constraints such as low-lying bridges and undersized dam outlets that limit water flow back into the system.

The cash will be sourced through a special account and an advance of future funds to ensure there is enough money to see the plan through to 2024.

Ms Gillard’s announcement, plus further proposals, will be financially met from existing government resources and funds set aside in this week’s Mid-Year Economic and Fiscal Outlook.

Legislation to set up the special account and the future funds is expected to be introduced to parliament by the end of the year.