The village's estimated 170 residents have been divided over the artwork proposed for the water tower in the centre of town, which supporters hope will be a tourist draw-card but opponents have slammed as a garish "monstrosity".

Lockhart Shire Council released a statement on Wednesday afternoon saying it would proceed with a variation of the design with some changes based on community feedback, including a petition signed by more than 90 locals.

The final decision was made by the selection committee who chose the original artwork, whose members include representatives from council, the Yerong Creek Progress Association, Eastern Riverina Arts and Riverina Water, which owns the tower.

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Yerong Creek Progress Association president John Holstein said he was "quite happy with the latest design".

"Wed like to thank council and the assessment panel and HEESCO for the work they've done to incorporate the recent feedback. We now hope the project can now proceed without any further delay," he said.

But resident Justine Isherwood, who has been vocal in her opposition to the mural since its first iteration was announced, said her fight was "far from over".

"We've had a token gesture with minimal changes. We are hoping hand on heart that our councillors will see our upset," she said.