The Bristol Avon catchment permitting trial will begin in earnest on 1 January 2017 and will run for four years.
Wessex said the move was prompted by the need to reduce levels of phosphorus being discharged from its sewage works into the River Avon, to meet the requirements of the Water Framework Directive.
A traditional individual site permitting approach would have meant expensive capital investment at all 24 sewage works where reduced phosphorus levels are required.
But by developing a catchment-wide permit with the EA, Wessex Water said it will minimise the risk of the failing to meet the new tighter discharge standards, and therefore better placed to meet the environmental objectives in the Bristol Avon with less upfront investment.
Wessex Water director of regulation and customer services Andy Pymer said: “This new approach helps to ensure we continue to enhance standards in the environment but at an overall lower cost to our customers.
“The Bristol Avon is an important river catchment for Wessex Water where, in addition to catchment permitting, we are actively working with many partners on other major influences within the catchment to reduce the level of phosphorus in the river system as part of a wider catchment-based approach.”
If the trial is successful, Wessex Water plans to roll out the approach more widely in the West Country and across the rest of the UK.