Some 100 water supply schemes around the country are at risk
A hosepipe ban is now in operation in the greater Dublin area as Irish Water calls urgently on the public to conserve water.
Production plants are struggling to meet increasing demand as drought conditions take a grip around the country.
Some 39 water supplies are under night time water restrictions and 100 are at risk.
As the heatwave continues, the demand for water is outstripping supply across the country.
From Monday, Dubliners will be fined €125 or face possible prosecution for using a hosepipe to water their garden, wash their car, or fill their children's paddling pool.
This measure could be extended beyond the capital within days, as Irish Water urgently appeals to the public to conserve water as much as possible and avoid unnecessary use.
It has been dry for the past four months, with Met Éireann reporting rainfall on par with 1976 when the country suffered a major drought.
The Water Conservation Order for Dublin will be in place for the whole of the month, but Irish Water already says it may have to extend that to protect longer term supplies in late summer and autumn.
Irish Water said it is backing up these orders by increasing the number of call centre agents to take calls from the public and we will follow up such reports to encourage water conservation measures and to offer technical support.
Irish Water's Kate Gannon said: "We urge customers to conserve water and to work with us by following our tips such as taking short showers instead of baths, turning taps off when brushing teeth and not using hosepipes in gardens and limiting use of water in paddling pools.
"It will take months for water levels to restore in raw water sources such as rivers, lakes and ground water supplies and for levels in our treated drinking water reservoirs to restore. We are asking the public to continue to conserve water in the months ahead and to follow our advice for longer term water conservation."
Similar drought orders have been introduced in Northern Ireland and in British water utilities.