Work on the water treatment, storage and education facility near Hastings' CBD is starting after resource consent was granted.
The facility – formerly known as Water Central and now called Waiaroha - is the largest and final project in Hastings District Council's drinking water strategy which was formulated after the 2016 Havelock North water crisis.
Mayor Sandra Hazlehurst said the project is a "considerable investment" that will service residents and ensure drinking water stays safe for future generations.
"Safe drinking water remains our number one priority, and it is immensely pleasing to see all of the projects that make up the strategy either completed or well under way."
The Waiaroha work site on the corner of Southampton St East and Hastings St South will be fenced off in the coming weeks to allow site preparation works to start.