Work on a new water treatment plant at Lough Talt in South Sligo is expected to start in September.
It will take 12 to 14 months to complete.
For some time now, almost 13,000 people in the area have been on a boil water notice since cryptosporidium was discovered in the supply
The Boil Water Notice being reissued last January after it only having been lifted in October 2018.
Irish Water says its sole focus is to find a solution which will enable the boil water notice to be lifted as quickly as possible.
Fine Gael Councillor Martin Connolly says news that work will be starting soon is welcome.