Fredericton will build a new water reservoir in the Douglas area pending approval of the 2017 budget as a way to boost further development in the area.

As the system is now, Coun. Dan Keenan said water can't travel any further up the hill, beyond McGregor and Diamond streets.

"[It will get] water up to the top of the hill, which allows us to utilize the new infrastructure that's been built there," said Keenan.

"The people there now are on city services but with the pressure that's there now, we can't get the water up any higher, so you will hit trouble as you try to develop."

Keenan said it will be a smaller reservoir than most people might see around the area.

"This will allow them to store water up there as well so this will help when, in regards to redundancy, if something happens to the power there's water already up there that we can use to service that area," said Keenan.

Keenan said construction could start in 2017.