Up to 73 kilometres of mainly iron water pipe is being replaced in the Dublin Region.
Irish Water will spend €28m on the next phase of a project which has already seen around 200 kilometres of pipes upgraded.
Similar works are being undertaken throughout the country, to improve supply and reduce leaks.
Irish Water's Jerry Grant says the current work on the Dublin Watermains Rehabilitation project will prevent huge amounts of wastage.
Mr Grant said: "Replacing this length of mains will save directly about 1.6 million litres per day.
"That's just part of the overall effort at reducing leakage because we'll also be reducing leakage through ordinary find and fix, and pressure management.
"But as we do, those pipes that are showing repeat leaks are replaced and directly we think that will replace about 1.6 million litres."