The current project will involve eight counties and 90 towns at Yulin and Yan'an cities in Shaanxi province. Some 268,000 people there will be the first to be moved out during the 12th Five-Year Plan (2011-2015) period, the official said.

Ren Chao, an official working for the government in Yulin city, told China Daily that there was not enough drinking water and its quality was poor.

"The plan to move the people, I hope, can provide us with a safer water supply," Ren said.

"Drinking water that contains excessive amounts of fluorine is harmful to teeth and gradually affects people's health," Ma Jun, who leads the Beijing-based Institute of Public and Environmental Affairs, said on Monday.

It is more practical for the government to relocate residents in those poor areas than to use technical means to improve the water quality, Ma said.

"Although the government has begun to move out residents, the biggest difficulty is how to keep improving the standard of living of residents in new areas and establish relevant facilities in time to match the relocation," Ma said.

"After all, sustainability is the most important thing - not only for the people who move but also for the government," Ma added.