The plant will be designed to treat the wastewater from the company's nutrition plant at McNab near Gore.
Council three waters asset manager Matt Bayliss said it became apparent early in the planning stages the council's existing wastewater ponds did not have the capacity to cope with increased loading from Mataura Valley Milk's new $240 million nutrition plant development.
``Building a new plant ensures we have environmentally and economically sustainable systems in place.''
The treatment plant was being built next to the council's wastewater treatment ponds and would treat up to 1500cu m of wastewater each day. At the moment, the council treats an average of 5400cu m of wastewater each day.
The council would oversee construction and operate the plant once it was finished.
The venture was ``one of several'' facets to the nutrition plant development in which Mataura Valley Milk and the council were working together.
Mr Bayliss said the ``state-of-the-art industrial hub'' would be significantly more complex than any of the council's existing wastewater treatment plants.
Mataura Valley Milk general manager Bernard May said the council had invested about $6.5million in the project.
