Water Resources Minister Ernie Bridge has announced stage one of an extended sewerage system for Denmark to be built in February and March next year.
Mr Bridge said the $240,000 first stage funded through the Authority's 1992-93 capital works program would result in 58 lots being sewered.
Stage Two, programmed for the 1993-94 financial year at a cost of $220,000 would see a further 43 lots join the new system.
Mr Bridge welcomed the project's go-ahead, saying environmental problems through nutrients from septic tanks seeping into groundwater and local estuaries would be alleviated.
"Potential health risks caused through the on-going use of septic tanks will also be reduced," he said.
The work would be carried out through the State Government's rural sewerage strategy, where the local council funds one third of the project and the Water Authority provides the balance.
The strategy, which is similar to the Government's highly successful Rural Water Strategy, applies to infill sewerage in communities of less than 20,000 people.
Mr Bridge said the aim of the strategy was to assist small communities get either a sewerage system or a significant upgrading or extension of a current system.
"This helps protect the environment in smaller communities and also provide opportunities for further expansion," he said.
The Shire of Denmark's contribution would fund some of the plant, labour and materials for the system which, when completed, would range over 2.3 kilometres.
The project would be managed by the Authority's Albany-based Great Southern Region.