According to Union Water Resources Minister Gajendra Singh Shekhawat, the Centre will determine the jurisdictions of the Krishna and Godavari river management boards (KRMB and GRMB).
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He was speaking after convening an apex council meeting involving the Centre, Andhra Pradesh and Telangana, the second since 2016.
The meeting is primarily to resolve the conflict between the two States over executing irrigation projects and sharing water from the Krishna and Godavari rivers.
The headquarters of the KRMB would be located in Andhra Pradesh.
With regards to sharing of river waters, the Telangana Chief Minister agreed to withdraw the case filed in Supreme Court, to allow the Centre to refer water sharing issues to the Krishna Godavari tribunal.
Regarding the sharing of Godavari waters, both the States were asked to send in their requests to the Centre so that it could refer them to the tribunal, a statement from the Water Resources Ministry said.
Andhra Pradesh Chief Minister and his Telangana counterpart had taken tough stands on projects such as the Rayalaseema lift irrigation scheme and enhancement of the carrying capacity of the Pothireddypadu head regulator.