Australia's Water Minister Penny Wong has announced a third round of buybacks as he encouraged sellers to release their water entitlements in the southern Murray Darling Basin.

The Federal Government made the call and invited irrigators to submit their price offers under a fresh 4120 million water purchasing tender which will open early next month.

According to Senator Wong, the two initial tenders conducted in January and March successfully attracted a good number of interested irrigators who want to sell their water entitlements.

She said that buying back the water entitlements from irrigators across the Basis is the best way to ensure the protection and health of the river. The buyback is intended to reduce the number of users, particularly irrigators, who depend their water use from it.

"By purchasing water and investing in irrigation infrastructure upgrades, the Rudd Government is also helping our irrigating communities prepare for the new, lower limits on water use that we can expect under the Basin Plan," he said.

The new round of tender will being on Mar 3 and will close on May 21, she said.

However, the government will entertain only sellers from the Murray, Goulburn, Campaspe and Loddon catchments in Victoria, and the South Australian portion of the Murray-Darling Basin.

She said sellers from New South Wales entitlements will not be allowed in the May tender.