Mexico's national water authority Conagua has condemned the actions of protesters at the El Zapotillo reservoir project, who halted construction at the work site this week.
The disruption cost millions of pesos, according to a Conagua release.
The protesters claim an injunction protects the towns of Temacapulín and Acasico, which will be flooded to make way for the new reservoir, paper Milenio reported.
The protests were illegal and without cause, and the offenders will be prosecuted, said Raúl Antonio Iglesias, director of Conagua's Lerma-Santiago-Pacífico river basin organization.
The El Zapotillo reservoir and El Zapotillo-León water transfer system will supply Jalisco state's capital Guadalajara and León city in Guanajuato state.
Spanish construction firm FCC, in association with compatriot Grupo Hermes and Mexican firm La Peninsular, is building the 2.1bn-peso (US$176mn) dam and reservoir. A tender is currently underway for the water transfer system.