The work will involve upgrading sewers and replacing two existing Wastewater Pumping Stations.
It will be carried out by BSG Civil Engineering in a number of phases over the next two-three years.
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When complete, this project will significantly reduce the risk of out of sewer flooding and environmental pollution in this part of the sewerage network during periods of heavy rainfall.
The first phase, which will begin in mid-February 2019, will include the installation of 2km of new sewers between the existing Dundrum Wastewater Treatment works and School Road.
NI Water is also hosting a 'drop-in' information event on the scheme, where residents, business owners and the public can find out more about the overall project.
The event is taking place on Wednesday 23 January at St Donard's Parochial Hall on Main Street from 4-7pm.
(CM/MH)
