A deal has been struck to ensure the promised water under the Murray-Darling Basin Plan will be returned to the environment, but over a longer period.

The timeline to recover 450 gigalitres of water earmarked for the environment has been pushed out until the end of 2027 and water infrastructure projects until the end of 2026, after the initial June 2024 target was on track to be missed.

The new plan – which limits the amount of water extracted from the basin – includes more options and funding to deliver the remaining water, such as through voluntary buybacks.

The 12-year plan to restore the nation’s largest and most complex river system, which runs through four states and dozens of towns and cities, was created in 2012 after years of overuse and the devastating millennium drought.

The Murray-Darling Basin Authority has previously advised there would be a shortfall of 750 gigalitres – about a quarter of the target – by June 2024.

Environment Minister Tanya Plibersek said the agreement struck between the federal government and NSW, South Australian, Queensland and ACT governments came at a crucial time with the next drought “just around the corner”.

“What we’re proposing is more time, more money, more options and more accountability,” she told reporters in Sydney on Tuesday.

“We can’t stand by and allow our threatened species, our rivers, our wetlands and the three million people who rely on this river system for their drinking water to be unprepared for the next dry period.”

Ms Plibersek said voluntary water buybacks would complement the infrastructure projects and that all options remained on the table.

“It is obvious that what’s happening at the moment isn’t working,” she said.

“What I’m proposing for that 450 gigalitres is that instead of relying on some mythical projects that haven’t eventuated until now, and are unlikely to eventuate in the future, we’ll also be open to water purchase.”

But the minister said she wanted to be careful speculating about the details of the water buybacks – such as how much money would be made available – as it would have the potential to distort the market.

“We also will be introducing measures to make sure that our water markets are better run and better protected,” she said.

Ms Plibersek added that more would be invested in water-saving projects to limit the amount that needs to be bought.

Victoria, which has previously opposed water buybacks, is the only basin government that hasn’t signed up to the new plan.

But Ms Plibersek said her door remained open and there were significant benefits for the state to sign.

The legislation will be introduced into federal parliament in coming weeks, with both houses to sit for two weeks from September 4.