The whole of Toddbrook Reservoir in Whaley Bridge is set to be rebuilt in the aftermath of the dam emergency, residents at a public meeting were told.
Daniel Greenhalgh, from the Canal and River Trust, told the meeting for evacuated residents held at Chapel-en-le-Frith High School that the entire reservoir, not just the dam, would be rebuilt.
He described it as a 'long term reconstruction project lasting years'.
The development came as police confirmed at the meeting that some residents were now being allowed to return home because of the reservoir's lower water level.
It's understood to involve the Horwich End area of Whaley Bridge, from where 55 residents were evacuated on Saturday.
Others evacuated face another night away from their homes, officers told the meeting.
Police said they must wait 'another 24 hours', although the position is expected to become clearer by noon on Wednesday, when engineers provide an update on the dam's safety and structure.
Deputy Chief Constable Rachel Swann said she needed assurance from engineers before she allows residents to return.
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"I've got to make sure if I let you go home then two days later, I don’t ask you to leave again," she told residents at the meeting.
"I have got a meeting at 12pm tomorrow, where I am expecting we will have good news."
"We will keep draining the water until it is safe to stop.
"What we need to do is just to check the reservoir is fit for when it rains again and we have got a yellow weather warning."
Emergency services have been at the reservoir in Derbyshire since last Thursday after heavy rain damaged the slipway of the dam - leading to the evacuation of around 1,500 people.
More than 400 tonnes of sand, gravel and stone have been airlifted onto the section of damaged slipway by an RAF Chinook helicopter to shore up the fractured area.
Huge pumps were then used to drain the reservoir of water.
Previously police said the water level must drop by eight metres so engineers can safely assess the damage.
The water level has now fallen by 9.5 metres.
DCC Swann said: "We have obviously been pumping the water out and it has gone down at a fast speed.
"It is now beyond 9.5 metres.
"It is crucial that the inspections are now made by experts to ensure that the dam wall is safe prior to residents returning to their homes.
"I appreciate that this has been a traumatic time for the people evacuated and everyone is working around the clock to ensure that they can return to their homes and businesses as soon as is safe to do so.
"Our main concern remains the safety of the public in Whaley Bridge and those people will only be allowed to return to the town when it is deemed absolutely safe and they are no longer at risk.
"I would like to thank them for their patience, support and understanding.
The Met Office has issued a yellow weather warning covering much of England, including the Derbyshire town, on Friday and Saturday.
Derbyshire Fire and Rescue Service said earlier: "Work is ongoing, and road closures and evacuations are still in place to preserve life.
"We will open roads and let people return home as soon as we can, but we have no way of knowing when this will be."
A further 39 tonnes of aggregate was dropped on the slipway by the RAF on Tuesday morning.
