Communities in southern NSW have been warned bushfires will likely impact water quality when rain finally falls.
While the forecast rain will be a welcome relief for fire crews and farmers, the Murray-Darling Basin Authority warns it's a "double-edged sword" as ash and sediment from bushfires is expected to be washed into streams, rivers and dams.
River operations executive director Andrew Reynolds says the fires will have an impact on water in the Upper Murray catchment above Hume Dam.
The river stretches from Victoria to NSW through the Snowy Mountains and the major towns of Corryong, Khancoban and Tumbarumba.
"This is the last thing our fire and drought-ravaged communities need right now," Mr Reynolds said in a statement on Wednesday.
The ongoing dry, hot and windy conditions have also put 20 areas in NSW and Victoria on red alert for blue-green algae.
Rainfall totals of 30 to 80 millimetres are forecast from Thursday with strong falls possible for fire grounds in the Snowy Mountains, southwest of Sydney and South Coast regions.
Water NSW is also preparing to limit potential impacts on the water quality in dam storages caused by ash runoff.
But chief executive David Harris said the rain forecast this week is not considered intense enough to wash material into catchments.
Several precautionary measures have been taken including using silt curtains to stop ash being washed into Warragamba Dam by heavy rainfall.