The first 10 kilometres of an underground pipeline to feed water to the new Northern Adelaide Irrigation Scheme will be laid this month.
Once complete, the 29km pipeline will irrigate 300 hectares of new export-focussed horticultural production which is expected to add $578 million to the South Australian economy each year.
"Supporting smart infrastructure projects creates construction jobs and develops new growth industries that will generate more jobs for South Australians well into the future," Premier Steven Marshall said on Tuesday.
The $155 million irrigation scheme is expected to deliver its first reclaimed water in 2019.
It will be suitable for use in the production of fruit and nuts, flowers, grapes, poultry and aquaculture.
The scheme is being jointly funded by the state and federal governments with some of the money also coming from connection fees and water use charges.
Federal Assistant Agriculture Minister Anne Ruston said irrigated agriculture accounted for one-third of South Australia's agriculture production.
"The project is a great example of the kind of infrastructure we are delivering to create jobs and stimulate economic growth for the benefit of rural communities," Senator Ruston said.
"It will consolidate local markets and boost high-quality fruit and vegetable exports, underpinning regional jobs across the agribusiness production, processing and marketing supply chain."