SAN LUIS RESERVOIR, CA. – A deal to expand a reservoir just south of the Bay Area is expected to provide a big boost to California’s water supply.

The nearly $1 billion deal involves the San Luis Reservoir, between Gilroy and Los Banos, according to the Mercury News.

San Luis Reservoir is a man-made lake located on San Luis Creek on the eastern slope of the Diablo Range in Merced County.

It is the fifth largest reservoir in California.

Eight state water agencies have reached an agreement with the federal government to increase their dam height by more than 10 feet.

This is expected to expand the reservoir enough to provide water to 650,000 people for an entire year.

The Mercury News reported that the Santa Clara Valley Water District, a San Jose agency that provides water to 2 million Santa Clara County residents, would contribute $435 million of the $942 million of the cost of the project.

In turn, Santa Clara County residents would receive the largest share of the new water.

Other agencies that would receive some of the water are the Westlands Water District in Fresno, the Byron Bethany Water District in Contra Costa County, the City of Tracy, the San Benito County Water District and the Del Puerto, San Luis and Pacheco water districts.