ISAAC Council Mayor Anne Baker expressed her disappointment over the Connors River Dam and Pipelines project suspension.
The SunWater board decided not to proceed with the project because the $1.3 billion cost was not viable.
Cr Baker said a lot of work had gone into the project.
"We're extremely disappointed given there's been a lot of background work there," she said.
"That's been earmarked for future water (and) we're very interested to see what the alternative strategy is."
Cr Baker made it clear IRC was not prepared to back down.
"We intend to continue to lobby for what those strategies are going to be," Cr Baker said.
"Just keeping those communications lines open and continually highlighting that we have to come up with a water strategy.
SunWater and the government will examine potential water availability from existing infrastructures, including the Fairbairn and Burdekin Dams.
Cr Baker assured residents solutions would be found.
"Development in the region won't stop and alternative water strategies to sustain growing communities will need to be worked on as a priority," she said.
"We are very keen to work in partnership with industry and government to sustain industry growth and build the prosperity of the region and Queensland as a whole.
"There is no immediate water crisis and I wish to reassure all residents new alternative water supply solutions will be found to sustain the growth of opportunity and development in the region."
Deputy Premier Jeff Seeney said the decision to suspend the project didn't mean a similar proposal wouldn't be possible in the future.