The Canadian River project received federal authorization in December 1950, and in November 1953 the legislature authorized the authority to organize as a legal entity and independent political subdivision of Texas. Eleven cities formed the authority: Amarillo, Borger, Pampa, Plainview, Lubbock, Slaton, Brownfield, Levelland, Lamesa, Tahoka, and O'Donnell. The city of Littlefield was originally included on the list but failed to confirm the creation of the authority and was therefore not made a member. Under a tri-state compact (Texas, Oklahoma, and New Mexico), Texas was entitled to store up to 500,000 acre-feet of water in conservation storage in the state. The authority received a permit from the Texas Board of Water Engineers to divert up to 100,000 acre-feet of water a year for use by the member cities and 51,000 acre-feet for use by industries.
In 1960 a repayment contract between the United States government and the Canadian River Municipal Water Authority was executed for construction of the project. The repayment schedule for the authority provided for the repayment, with interest, over a fifty-year period. Each city negotiated a contract with the Canadian River Municipal Water Authority for that city's estimate of water needs and the city's assumption of a percentage of the construction debt. Sale of water to cities outside of the authority is possible only by a city's willingness to release a portion of its water. The dam, crossing the Canadian River nine miles west of Borger, is 226 feet high and 6,380 feet long. The aqueduct system, with 322 miles of pipeline, ten pumping plants, and three regulating reservoirs, furnishes municipal and industrial water to the cities of the authority.
The authority furnished water to the eleven cities from Lake Meredith from 1968, when construction of the system was completed, to 2010, when water levels in the lake fell too low to allow continued diversions. Beginning in 2001 the authority provided an alternative and supplemental source of water from groundwater resources in Roberts County, located about thirty miles east of Lake Meredith. Originally, twenty-seven wells were provided and an additional aqueduct thirty-five miles long brought the groundwater to a point on the original aqueduct where the groundwater could be mixed with the surface water from the lake. After the surface water source became unavailable, additional wells were installed, bringing the total to forty-five wells and enabling the authority to supply up to 65,000 acre-feet of groundwater to the member cities. Purchases of water rights in the vicinity brought the authority’s holdings to more than 440,000 acres, making it the largest holder of underground water rights in the state. As of 2013, planning was underway to install an additional aqueduct and wells to increase supplies to as much as 130,000 acre-feet of water annually.