Their home is no longer sinking, they have a new garage and the flood of mine water that has inundated their Bridge Street property for decades is gone.

The couple, both in their 90s, moved back into their beloved home on the weekend following a radical $260,000 state government building project to divert water from an abandoned underground mine.

"It really has been a tremendous amount of work to get rid of the water," Mr Watson said.

"They told me when they dug in the backyard with a machine that a huge spray of water shot into the neighbour's place and made a terrible mess, that's how great the pressure was."

The Newcastle Herald revealed in July last year how the couple's case had been passed between more than six government organisations since 1982 and the water just kept coming.

Mr Watson wrote countless letters seeking help, but was repeatedly told he had to "prove" the water was coming from the old Ellereay No.2 Mine that maps indicated sat just 25 metres from his back fence.

"It's certainly been an ordeal, but we are extremely happy to be home and really just hope it works so the water stays away," Mr Watson said.

"You can hear the flow of water down the drain where they diverted it and it's flowing more than I've ever seen it before. There must be a huge head of water sitting in the old mine."

The Watsons had to move out until the works were complete, and a week ago they moved back into the home where Mrs Watson was born.

"There is certainly no place like home and we are just so glad to be back," Mrs Watson said.

Following numerous stories in the Herald, Newcastle University's Professor Stephen Fityus was appointed by the state government to investigate and found a "mining effect" at the Watsons' house was "not only plausible, but likely".

The garage and back rooms of the house, which had both sunk, were removed to allow 60 centimetres of soil to be excavated and a drainage blanket installed.

A series of drainage channels were then installed to divert the water from the property, and the shed and back of the house were replaced.

The money was sourced from the Derelict Mines Program.