The 230 megalitre scheme, which will use a new pumping station to abstract water from the Trent, should be built by 2014.
Once complete the new treatment works will be able to provide 20 million litres of drinking water per day to the Lincoln area.
Director of water services Paul Valleley said the project was vital because Anglian’s region includes some of the driest and lowest lying parts of the country and is also one of the fastest growing parts of the country. “So we may face a future with more people and less rain,” he said. “That is why projects like the one at Newton are so important.”
However, he said the company continues to urge customers to use less water, and not rely on engineering solutions.