The lack of rain and the government's misuse of water supplies are some of the main reasons the country is suffering from drought.
Bolivia's government declared a state of emergency over a lack of water caused by a severe drought in large swaths of the country on Tuesday, devoting state funds to ease a crisis that has battered agriculture.
Bolivia's Vice Ministry of Civil Defence estimated that the drought has affected 125,000 families, the worst in 25-years. Severe water shortages were reported in seven of the ten biggest cities and sparked protests in various areas.
"We have to be prepared for the worst," President Evo Morales said at a press conference on Monday.
The decree unblocks funding for the government and local authorities to tackle the water shortage.
Morales called on local governments to devote funds and workers to drill wells and transport water to cities in vehicles, with the support of the armed forces, from nearby bodies of water.
Bolivians, frustrated by the prolonged drought, protested in major cities while clashes also occurred between miners and farmers over the use of aquifers.
Residents of El Alto, Bolivia's second largest city, held some authorities hostage to demand the government explain its plans to allay the shortage last week.
Some environmentalists and local activists say the Bolivian government misused the water supply, ignored growing pollution from mining and failed to act on existing management plans to prevent lakes from rapidly drying.
"The Bolivian government is blaming El Nino and climate change, and certainly those played a role, but they are not saying that they have also failed to implement the management plan for the basin," a senior researcher, who studies lake ecosystems in New York, Lisa Borre told National Geographic early this year.
According to local media sources, the state-run water utility EPSAS has already started rationing water. Some districts are being served by tanker lorries.