ALBANY -- State officials and retailers have agreed to phase-in a new state law that allows for collecting 5-cent deposits on bottles of water.

A federal judge ruled Friday the law would take effect Saturday. The sides agreed to let stores comply by Nov. 8.

"Less than a week was not enough time for New York's 21,000 food stores to come into compliance," said James Rogers, president of the Food Industry Alliance. Rogers said stores will have to re-program every cash register and bottle-deposit machine to account for the nickel deposit.

While the program will start Saturday, stores will have a grace period of one week to phase-in the program, said Morgan Hook, a spokesman for Gov. David Paterson.

The 5-cent deposits on bottles of water were scheduled to start June 1 as an expansion of the 27-year-old law that requires deposits on bottles and cans of soda and beer. But lawsuits from bottlers and stores had stopped it temporarily.

U.S. District Court Judge Deborah Batts lifted an injunction late Friday and said the deposits would start Saturday.

"The state agreed that an orderly phase-in was preferable to a rushed start-up date," Rogers said.