Water bills are set to rise by an average of £31 per year over five years from April, the industry regulator has said.
Ofwat said the increase was enough for water companies in England and Wales to pay for upgrades and reduce sewage discharges.
The increase is higher than the £19 per year Ofwat previously proposed, but is lower than what water companies had requested.
It comes amid public anger over sewage discharges into waterways and a continuing squeeze on household finances.