County and city councils will face prosecution through the courts from early next year if they pollute rivers and lakes with poorly treated sewage.
Under regulations currently being finalised, a new licensing system for sewage treatment facilities is to come into operation from early next year.
The Environmental Protection Agency (EPA) will assume responsibility for enforcing the new system, and will set strict limits on pollutants for each facility.
Councils that breach these limits will face prosecution.
At present, councils face no sanctions if they fail to maintain plants to minimum standards, and the lack of adequate enforcement in the area was highlighted by the European Commission in a successful prosecution of Ireland over its failure to protect water sources from pollution.
The powers will be similar to those given to the EPA earlier this year in relation to drinking water facilities operated by local authorities.
Up until March, there was no sanction in relation to substandard drinking water plants, such as the plant at Terryland in Galway which was at the centre of the cryptosporidium outbreak in the city.
The new powers for the EPA came as it identified the protection of water as one of its key objectives over the next 13 years.
In its new strategy, 2020 Vision, the agency said it would also be focusing its work on five additional areas: climate change; protecting rural biodiversity; enforcing environmental laws; protecting air quality and the sustainable use of resources.
In relation to water, the agency said it must be managed as a "key national resource and used in a sustainable manner by all sectors of society".
It has called for "climate-proofing" of all local and regional development plans "to minimise the unavoidable effects of weather-related impacts".
Ireland also "needs to be at the forefront of adopting new approaches and low carbon technologies".
The agency also said that new targets announced in March for renewable energy had to be met "at a minimum".
Transport policy also "must take full account of climate change issues and greenhouse gas emissions", the new strategy states.
The strategy warns that much greater effort will be needed to protect biodiversity in Ireland, and that a "number of native Irish species and their habitats are under threat from a variety of pressures", including intensification of agriculture and the spread of urban areas.
The strategy has also identified a series of shorter-term aims over the coming three years, including a new inspection system for local authorities in relation to drinking water standards.
The agency said it was also committed to "take enforcement action against local authorities causing water pollution by their failure to carry out their statutory environmental duties".
The director general of the EPA, Dr Mary Kelly, said the strategy "has set out a vision for Ireland's environment to the year 2020 and has identified clearly what must happen for that vision to become reality".
Meanwhile, new European legislation which will require all water sources to comply with minimum water quality standards will be the subject of a major conference in Dublin over the coming days.
The conference, on the EU water framework directive, will hear how the legislation will require the clean-up of a number of lakes and rivers in Ireland between now and 2015.