The Biden administration and eight California water agencies have reached an agreement to share in the costs of raising a dam to expand San Luis Reservoir, a nearly $1-billion project intended to increase the state’s water-storage capacity and benefit a group of urban communities and agricultural areas.

The plan to raise B.F. Sisk Dam and enlarge the reservoir near Los Banos will enable it to hold more water during wet years, boosting the reserves of water suppliers in parts of the Bay Area and the San Joaquin Valley.