(CN) — To celebrations by environmentalists, California’s largest irrigation district on Tuesday rejected funding a contentious $17-billion water project that would replumb the West Coast’s largest estuary.

The decision by the Westlands Water District, which provides water to more than 700 farms in the nation’s most productive farming region, casts doubt over the future of a project championed by Gov. Jerry Brown.

Critics of the plan known as the California WaterFix or the Delta Tunnels called the water district’s vote a major blow to the state’s decades-old public works project.

“Today is a very good day for California,” said Barbara Barrigan-Parrilla, executive director of Restore the Delta. “They now have to come up with a lot more money for the Delta Tunnels.”

Citing the state’s shaky financial estimates and presumed cost increases for its Central Valley-based agricultural customers, the water district voted 7-1 against participating in the project.

Westlands and other water suppliers that would receive water deliveries from the plan are expected to pick up a major portion of the cost.

Brown considers the tunnels a legacy project and sells it as a critical renovation of the state’s water supply network. His office calls the project “essential” to improving reliability of the water supply for more than 25 million Californians.

The ambitious plan calls for two 35-mile tunnels under the Sacramento-San Joaquin River Delta. The tunnels would funnel water around the Delta to the state’s southernmost farmers and cities, including Los Angeles. Federal fisheries officials signed off on the project in June, saying it could be completed without devastating impacts to native salmon and other endangered fish species.

Brown’s administration called the Westlands’ vote disappointing but not a death blow.

“Our aging water infrastructure needs to be modernized. Failing to act puts future water supply reliability at risk. This vote, while disappointing, in no way signals the end of WaterFix,” California Secretary for Natural Resources John Laird said in a statement.

Critics and Delta residents have blasted Brown for pushing a plan they say will have disastrous environmental impacts on the Delta’s fragile ecosystem.

Nor has the state forgotten the devastating effects of what many view as Los Angeles’ giant theft of water from the Owens Valley, known to most non-Californians, if at all, from the movie “Chinatown.”

Delta area lawmakers applauded the water district for backing out of the plan.

“The flimsy financials of the Delta Tunnels project became more and more clear as time led on,” said Assemblyman Jim, D-Discovery Bay, in eastern Contra Costa County. “This is a tiny victory as we continue to demand greater transparency to the true costs of this boondoggle.”

Westlands’ vote comes on the heels of a recent federal audit that revealed that for years the U.S. Bureau of Reclamation picked up the tab for state water districts during the project’s planning stages. Auditors said the bureau shifted $50 million to the WaterFix on behalf of water contractors, without Congressional approval.

Sacramento County and a horde of Northern California water agencies have sued to stop Brown’s project in state court. They call the project’s environmental review — more than 40,000 pages — “dizzying” and “shifting.”

The Southern California-based Metropolitan Water District, the nation’s largest water supplier, is to vote whether to support the project in October. Jeffrey Kightlinger, Metropolitan general manger, said the state must find a way to bring farming and urban water suppliers back to the bargaining table.

“It’s equally clear that actions must be taken to secure a reliable water supply for the state and to safeguard our economy. California must find a path forward from here that works for all of the partners,” Kightlinger said in a statement.