The project includes the construction of two new treatment plants.
€21.5 million is being invested to upgrade Offaly's water supply.
Two new water treatment plants and additional reservoirs are being built for both the Birr and Tullamore Water Supply Schemes.
Irish Water says the works are underway and progressing well, and are expected to be completed next autumn.
The body says this will provide a dependable and secure drinking water supply to over 18,000 customers in the Birr, Tullamore and Clonaslee areas, while also ensuring they have the required infrastructure to support ongoing economic growth and social development.