A trial at Neerim South wastewater treatment plant could lead to significant reductions in the amount of electricity the plant uses.
Gippsland Water has received a $50,000 state government grant to run the six-month trial of a technology called Nanobubble Oxygenation.
Managing director Sarah Cumming said the technology works by making the aeration process more efficient and reduces the operational time of other more energy intensive equipment such as pumps and motors.
She said that if the trial achieved its objectives, the system could be installed permanently at Neerim South and opportunities to put it at other Gippsland Water treatment plants would be investigated.
The findings from the trial would be shared with the rest of the state's water industry, Ms Cumming said.