The new team will contain about 120 Southern Water employees and 80 from the company’s strategic solutions partner MWH.
For the previous investment cycle (AMP5), Southern Water’s capital projects were all designed by outsourced companies.
Southern Water’s chief engineer Ian Kirkaldy said: “By rebuilding our engineering skill-set we’re able to take greater control.
“The current model perhaps relies too heavily on key decisions being made by suppliers.
“Changing the way we work will allow us to take ownership of projects and make the key decisions.”
The engineering team will include civil, mechanical and electrical engineers, environmentalists, modellers and hydraulics experts.
Recruitment for the positions will look at graduates through to senior managers, offer training for new starters, and it will look across Europe.
Kirkaldy said he wants Southern Water to be recognised as “a leading engineering organisation”.
He added: “Our huge advantage is having a blank sheet of paper. We are able to try new ways of working, without being tied the past.
“Our priority now is to get basic components of the team in place. We are being particularly bold in that we are moving there quite rapidly.”