In mid-July 2019, a boil water notice was issued to Ohakune residents after heavy rain caused operational issues at the plant and uncertainty about the safety of drinking the water.
Cameron said the upgrade would ensure this did not happen again.
"It needs better filtration systems which are just really overwhelmed by the amount of water that we use because we have up to 15,000 people coming in the weekends so it needs to be made for that, if not bigger."
He said the plant needed to be ready for increases in both residential and tourist numbers.
In early 2020 the council will give locals another chance to make submissions on the project, Cameron said.
"I would be surprised if we get one submission against it. When we went out to the public the feeling was to get on with it, we can't afford not to do it."
Cameron said with an additional chairlift planned at Turoa skifield, there had been concerns around wastewater as there is no waste pipe running down Turoa.
He said there had been talks with iwi about the extra waste, whether there would be enough capacity in treatment ponds and if using a truck to carry the water coming off the mountain would be the correct process.
The feasibility study will investigate this further.
Whanganui District Council also received funding from the Ministry with $150,644 for the installation of a public toilet facility and bus shelter at Taupo Quay.