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Mexican national water authority Conagua and the Hidalgo state government will invest 545mn pesos (US$46.7mn) during 2011 in five irrigation modules, paper El Universal reported.
The funds will be used to re-line the main water channels in the area, saving up to 40% of the water distributed through them.
Local Conagua representative José Luis Matia confirmed the plan during the opening of the El Tumba irrigation channel.
The 32km channel cost 70mn pesos and will serve 2,500ha of agricultural land.
Lining of the secondary canals should be completed within 18 months, Hidalgo state governor Francisco Olvera was reported as saying.