A plan to raise and expand California’s largest reservoir is on hold as federal officials look for partners to share in the $1.4 billion cost.

The federal Bureau of Reclamation also must grapple with opponents who have sued, saying the Shasta Dam project violates state law.

The bureau has long-pushed to raise its 602-foot Shasta Dam by 18.5 feet and enlarge the reservoir by 630,000 acre-feet, saying it would increase water supply reliability and reduce flood risks. An acre-foot is about 326,000 gallons of water.

Funding for the federal project has been delayed, halting the award of a...