Day Zero plan follows recent drought in Western Cape.
Cape Town is currently preparing contingency plans outlining measures to deal with future drought situations, following the recent prolonged water crisis in the Western Cape.
The city says the plan is designed to avoid a "Day Zero" scenario, in which Cape Town residents could be left completely without water, by putting in place measures to reduce water consumption as well as increase reserves.
The city's Energy Efficiency Forum said the harsh impact of climate change was evidenced by the recent drought which saw Cape Town's reserve of potable water dip below 10 per cent.
The agency said the city's plans include the construction of a desalination plant which would deliver between 10 million to 20 million litres of water per day by May 2018.
Daily water consumption is currently 640 million litres in the city whose population doubled from around two million people in 2000 to just below four million residents in 2014.