Brazil’s three most populous states are experiencing their worst drought since 1930, Environment Minister Izabella Teixeira has said.
The states of Sao Paulo, Rio de Janeiro and Minas Gerais must save water, Izabella Teixeira said after an emergency meeting in the capital Brasilia.
Izabella Teixeira described the water crisis as “delicate” and “worrying”.
Industry and agriculture are expected to be affected, further damaging Brazil’s troubled economy.
The drought is also having an impact on energy supplies, with reduced generation from hydroelectric dams.
Brazil is supposed to be in the middle of its rainy season but there has been scant rainfall in the south-east and the drought shows no sign of abating.
The crisis comes at a time of high demand for energy, with soaring temperatures in the summer months.
“Since records for Brazil’s south-eastern region began 84 years ago, we have never seen such a delicate and worrying situation,” said Izabella Teixeira.
Her comments came at the end of a meeting with five other ministers at the presidential palace in Brasilia to discuss the drought.
The crisis began in Sao Paulo, where hundreds of thousands of residents have been affected by frequent cuts in water supplies, our correspondent says.
The city’s Cantareira reservoir system, which serves over eight million people, has now dropped to 5.2% of its capacity despite recent rain, Brazil’s TV Globo reported.
Accumulated rainfall in the area of Cantareira is said to be only 33.5% of that predicted for the month, Globo’s G1 news site added.
Sao Paulo state suffered similar serious drought problems last year.
Governor Geraldo Alckmin has taken several measures, such as raising charges for high consumption levels, offering discounts to those who reduce use, and limiting the amounts captured by industries and agriculture from rivers.
Critics blame poor planning and politics for the worsening situation.
Political opponents say the state authorities failed to respond quickly enough to the crisis because Geraldo Alckmin did not want to alarm people as he was seeking re-election in October 2014, allegations he disputes.
In Rio de Janeiro state, the main water reservoir has dropped to level zero for the first time since it was built.
Environment Secretary Andre Correa acknowledged that the state was experiencing “the worst water crisis in its history”.
However, he said there was enough water in other reservoirs to avoid rationing in Rio de Janeiro for at least another six months.
Andre Correa described the situation in Sao Paulo as “infinitely worse”.
Rio de Janeiro and Minas Gerais are asking residents and industries to reduce water consumption by as much as 30%.
Brazilia’s President Dilma Rousseff has cancelled a planned trip to Japan over continuing mass anti-government protests across the country.
The move is an indication of the seriousness of the situation confronting her, correspondents say.
In the north-eastern city of Salvador, police fired tear gas and rubber bullets to disperse protesters ahead of an international football match there.
Big rallies are being staged in Rio de Janeiro, Brasilia and other cities.
Demonstrators in Sao Paulo earlier said they would take to the streets “to celebrate” the reversal of a public-transport fare increase announced on Wednesday.
The protests, which were originally triggered by the increase, have since grown into a much wider movement.
Demonstrators are angry at corruption and spending on next year’s World Cup.
Brazilia’s President Dilma Rousseff has cancelled a planned trip to Japan over continuing mass anti-government protests across the country
On Thursday, President Dilma Rousseff’s office announced that her trip to Japan planned for next week had been called off. Another visit to the Brazilian state of Bahia has also been put on hold.
In a statement, the office acknowledged that the decision had been taken as a result of the continuing demonstrations.
President Dilma Rousseff earlier publicly stated that she was proud that so many people were fighting for a better country.
In Salvador on Thursday, clashes erupted when protesters tried to break through a police barrier near the stadium where a Confederations Cup match between Nigeria and Uruguay is due start later. It was not immediately clear if there were any injuries.
Meanwhile, thousands of people are marching in central Rio de Janeiro near the iconic Candelaria Church, but there have been no reports of violence.
The city authorities earlier erected barricades around the state legislature building, which was vandalized during protests on Monday.
The state governor’s office, Guanabara Palace, and the mayor’s office had been secured by police cordons.
A number of Rio shopkeepers had put up wooden hoardings to protect the front of their businesses and some banks have done the same.
In the capital Brasilia, big crowds gathered outside the National Congress building.
Previous Confederations Cup matches have drawn protests, with demonstrators expressing their anger at steep ticket prices and the money spent on the Confederations Cup, the 2014 World Cup and the 2016 Rio Olympics.