Hunter Water is installing a permanent odour control unit on the wastewater pump station in the Marketown shopping centre carpark in Newcastle West, as part of a long-term fix for what has become known by some as the Newcastle West 'stink pipe'.
The work is part of a $5 million upgrade, which the Newcastle Herald reported last year.
Hunter Water said in a statement on Thursday morning the upgrade would reduce maintenance required at the site in future, improve existing fixtures and "support population growth in the area".
The work is expected to continue into next year.
An interim odour control unit was installed last year, as concrete, pipework, covers and hatches at the pump station were remediated, Hunter Water said.
The utility's asset solutions group manager Justin Watts said the upgrade would improve community amenity around one of the city's largest pump stations - which transfers waste water to Burwood beach from 15 suburbs around Lambton and the CBD.
"During the next six months of the major upgrade we'll switch out the interim OCU [odour control unit] we put in late last year with a large permanent unit," Mr Watts said.
"This permanent OCU will continue the greatly improved experience for residents and shoppers by extracting and filtering bad-smelling gases like hydrogen sulphide, known as rotten egg gas.
"The added benefit of dramatically reducing hydrogen sulphide also limits corrosion, extending the sewerage system's operational life and making network management and maintenance more efficient."