Orange County officials do not know how the grants immediately will affect local communities but said more information will be available when the grants are distributed.
The funds will be distributed through the N.C. Commerce Department, the N.C. Rural Center and the N.C. Department of Environment and Natural Resources.
The grants are prioritized to benefit counties experiencing the most severe emergency water supply situations, states a Monday press release from Easley's office.
The press release states that the western two-thirds of the state are in severe to exceptional drought -- the most severe categories -- and are the most likely counties to receive funding.
Chapel Hill is in the severe category.
Grant money will enable towns to ensure a safe and adequate water supply by allowing neighboring communities to connect their water supplies, the press release states. Communities can provide water to each other in an emergency or as needed.
Julie Haigler, director of N.C. Rural Center Water and Sewer Programs, which is providing $10 million of the funds, said the money came from the Clean Water Bonds, approved by the N.C. voters in 1998.
"Many areas are absolutely out of water, especially counties just west of Mecklenburg County," said Haigler.
She said Cleveland, Rutherford and Lincoln counties are the counties in "desperate need."