The work will get underway on 13 December and is expected to take four months to complete.
The five sections of mains being replaced have a total length of 10.5km and have been subject to frequent bursts and leakage, leading to disruptions to supply on a number of occasions.
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Steven Blennerhassett, Water Networks Programme regional lead with Irish Water, said: "By replacing these old sections of water main we will address what has become a regular problem of supply outages due to burst pipes. This will benefit the residents and businesses in Newtownshandrum by providing them with a secure and reliable water supply.
"This work will also reduce leakage on the network which will help to reduce the volume of treated water that is lost unnecessarily."
(CD/LM)
