Following years of opposition and questions about the dam's environmental impact and financial viability, the regional council finally agreed to write off the $14m spent so far on the scheme by its investment company, HBRIC Ltd, and to no longer ring-fence the remaining $66m of ratepayers money originally pledged to the dam.
The dam was also intrinsically linked to Plan Change 6, which is due to come into force mid-next year and includes stricter nutrient limits and minimum river flows for the Tukituki River which are designed to improve water quality across the whole Tukituki catchment.
Without the 'flushing flows' which were to be delivered by the dam, there are fears the plan's tougher environmental regulations will have a negative impact on primary industries and that CHB farmers will face increased irrigation bans during summer.
Ms Walker said the dam decision meant CHB was now dealing with "a double-whammy" of disappointment, and that the regional council appeared to be consumed by water issues on the Heretaunga Plains.
She said for several years, CHB had been dealing with issues similar to those now before the Heretaunga Plains community, which was facing aquifer over-allocation and the possibility of a Water Conservation Order in one of its main catchments.
"What seems to have been forgotten is that the Tukituki catchment was identified as the priority area in the region for improving water quality and quantity - that's why the whole conversation about Plan Change 6 and the Ruataniwha Water Storage Scheme (RWSS) began several years ago," Ms Walker said.
CHB water consents had been over-allocated for years, with no new consents considered by the regional council in the catchment - which produced about a quarter of Hawke's Bay's primary produce exports.
"Quite rightly, water storage was identified as a key to securing the future for water in our community and Central Hawke's Bay District Council will continue to support initiatives that have water storage at their core. This may be Ruataniwha, or it may be some other solutions.
"Water users in the catchment (and beyond) are now faced with the short-term issue of restricted water takes as Plan Change 6 comes into effect in mid-2018. Because RWSS was promoted as the solution to this part of the plan for so long, water users are now having to think about water quantity solutions in another way - and quickly."
Regional council chairman Rex Graham said CHB had not been forgotten about.
"I am deeply concerned that we ran Plan Change 6 alongside the [RWSS]. The people who were the proponents of the dam ... it was a big risk they took with the lives and the aspirations of the people of Central Hawke's Bay and it hasn't worked out.
"So now we need to look at Plan Change 6 because we don't want to affect people negatively and so we'll have to say, 'how do we make this work a different way?"'
He said he wanted CHB residents to "get their heads together" and give feedback and input to the council on what they wanted in terms of solutions for water issues in the district.
