Ben Lomond Water announced yesterday that a $5.5 million contract had been signed for the design and construction of a water treatment plant at Westbury.

The plant will produce and supply water that meets the Australian Drinking Water Quality Guidelines to Westbury, Hagley and Exton residents and is expected to be in operation by June next year.

The $5.5 million project has been contracted to Aquatec-Maxcon Pty Ltd.

Ben Lomond Water chief executive Barry Cash said that the project would bring significant improvements to the region.

``It's particularly exciting for us because as I said it's the largest project for water treatment that we have going forward,'' he said.

``The first stage has started already and within a year we hope to have these 2500 people with fully treated water.''

The project began in the late '80s when the former Westbury Council built a dam on the Westbury Water Treatment Plant site.

``(That) did provide some improvements in water quality because they were then able to only pump out of the river when it was relatively clean,'' Mr Cash said.

``But at the moment that's all it is . . . so this will be a significant improvement in water quality.''

The treatment plant will work by pumping water out of the Meander River into the 3.1 megalitre-a-day water treatment plant.

The water will then be transferred to the reservoir before it uses a dissolved air flotation filtration process, similar to that of the Distillery Creek Water Treatment Plant near Launceston, to supply water to Hagley and Westbury residents.

Water supply will be delivered to Exton by a $1.3 million pipeline that is expected to be built later this year.

The $1.5 million construction of the 5.5 megalitre reservoir is being undertaken on a separate contract.

Meander Valley Mayor Craig Perkins said the project would help promote the region.

``It'll help encourage it as a place to live,'' he said.

The Campbell Town and Scamander plants are in the commission stage and all residents should expect to have fully treated water within six months.

Lilydale, Fingal, Bracknell, Branxholm, Derby and Mole Creek are the next towns Ben Lomond Water will work on.