The system will use reed beds to treat effluent from the Turlinjah township, which currently relies on septic tanks for its sewage disposal.

Council's works and facilities committee chairman Keith Dance said the new scheme would be an Australian first, although reed beds had been used successfully in Europe for more than 20 years.

Cr Dance said waste water would be piped from the existing septic tanks in Turlinjah to a deep reed bed just north of the village.

"As the waste water passes through the bed, the reeds suck up lots of the nutrients, drastically reducing the number of faecal coliforms in the end product," he said.

"The treated effluent, which has one 500th the number of faecal coliforms in untreated effluent, will then be used to water existing olive groves and pastures.

"By taking this route, we will be protecting public health and the health of Tuross Lake, an important oyster growing estuary very close to Turlinjah."

Council's Water and Waste manager Angus McLean said schemes incorporating reed beds had proven successful in Europe.

"The European experience has shown the schemes to be viable, cost-effective, environmentally friendly and odourless," Mr McLean said.

"They are also an economic way to provide sewerage to small townships and may be used elsewhere in the shire in areas awaiting sewerage schemes."

Council has received a $241,000 Coast and Clean Seas grant towards the half million dollar project.

The cost of running the scheme will be about $6000 a year, with funding expected to come from a special rate on Turlinjah residents, proposed to be about half the rate paid by residents in sewered towns.

Mr McLean said council would not consider introducing the rate until the scheme was fully operational, which could take as long as two years.