The Marshall Islands on Friday hailed a US decision to declare a drought disaster in the parched Pacific nation, welcoming much-needed aid from Washington to cope with one of the worst dry spells in its history.

US President Barack Obama signed a disaster declaration Thursday as the drought in the Marshalls enters its fourth month, with residents scrambling to find fresh water amid mounting concerns over food crops.

Marshalls and its Pacific neighbours are in the grips of a drought caused by one of the strongest El Nino events in recorded history, according to US weather officials.

Obama's declaration will trigger $3.0 to 4.0 million in aid from Washington, according to a US official in Majuro.

The money is expected to be put toward drought damaged crops that support subsistence islanders in remote parts of the Pacific nation, according to the Marshall's government.

"The president's action makes federal funding available for US government emergency relief and reconstruction assistance to the Republic of the Marshall Islands," a White House statement said.

Kino Kabua, Marshalls' deputy chief secretary overseeing the drought response, said the US declaration would boost resources and provide much needed reverse osmosis (RO) water-filtration units.

"Obviously we cannot provide RO units to all islands at the moment but... once the additional ones arrive, we will send out more," he said.

The Marshalls declared a drought emergency in February, then elevated it to a disaster and appealed to the United States and other countries for aid.

Australia, India, the European Union and the Asian Development Bank have provided funding in recent weeks to buy water filtration units, water delivery trucks and catchment tanks.

About a third of the Marshalls' population of 56,000 rely on subsistence farming on remote, difficult to access islands, eating fish, breadfruit, pandanus, coconuts and bananas.

Crops began wilting in March, several months into the drought.

"I can tell you that the water situation is getting worse," said Ota Kisino, the mayor of Wotje atoll in the northern islands.

In the capital Majuro, water is being rationed to four hours, just one day per week and the supply of water in the city reservoir has dwindled to less than half its capacity.

Elsewhere in the region, the Federated States of Micronesia and Palau have declared states of emergency, while Guam and the Northern Marianas are experiencing low rainfall.