The 30-month project is being carried out for Northumbrian Water.
It involves building new treatment facilities alongside the current Horsley plant, which will continue to operate until the new project is complete.
Adrian Ringrose, chief executive of Interserve, said: "Both Interserve and Doosan Enpure have an established track record of delivering major utilities projects and were excited to be working together on this project for Northumbrian Water which will give the residents of Tyneside a world-class facility that will be used for years to come. Where possible, we will use local resources, while supporting the local economy and employment in the region."
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Noel Cooper, Northumbrian Waters head of water supply, added: "We are committed to providing our customers with unrivalled customer experience. We know how much our customers rely on their tap water so ensuring it is excellent quality is a top priority. This work will not only ensure that the Horsley water treatment works continues to meet ever increasing water quality standards, it will also improve the sites resilience."
The Horsley site supplies up to 150 million litres of water a day to 800,000 customers on Tyneside.
Work to upgrade the facility will begin later this month.
(LM)
