Following 3 boil notices so far this year and community concerns, Whakatāne District Council said it's set aside funding to progress a new water treatment plant for Rūātoki.
Council said using funding from the long term plan, construction investigations are expected to begin later this year.
It said commissioning for the new plant will begin once design and resourcing are complete.
More than seven alternative water sites were been looked into, but Council said retaining the existing source with higher technology treatment will be the best option long term.
Transition Director of Three Waters Nic Johansson said Council have been trialing a system designed to remove fine particles from the water, clarifying it during heavy rain events - which could be used at Rūātoki in future.
"Trials to date have been promising, but the system is not yet operational," he said.
He warned until the upgraded treatment and new plant is in place, boil water notices will continue to be put in place during and after heavy rain fall.
The Rūātoki community has voiced concerns about a waterborne illness impacting children and elders in the community.
Council said they have not been advised by the Ministry of Health of any waterborne illness in Rūātoki, and if any issues were identified Council and water services would be told.
It also reminded residents to boil all water during a boil notice.
Johansson said while some households have installed home filtration systems, all water from the town supply must still be boiled during a notice, regardless of whether a household filter is used.
He encouraged residents with alternative water sources to test their supply, particularly after a rain event.
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