Did cause or permit an environmental hazard to the waters of Post Office Creek located in Kyneton on 07.07.2016, contrary to s.27A(1)(c).

The Kyneton Magistrates' Court has ordered Coliban Water to fund a $100,000 environmental project after a burst pipeline sent sewage flowing into Kyneton's Post Office Creek, in July 2016.

Environment Protection Authority Victoria (EPA) Executive Director Damian Wells said EPA prosecuted the water company after more than one million litres of raw sewage from Kyneton escaped, due to an issue at its Jeffrey Street pumping station.

"The pipe burst just before midnight, and it wasn't until 9am before maintenance workers spotted the lower than usual flows into the Kyneton Water Reclamation Plant and raised the alarm," Mr Well said.

Coliban Water reported the spill to EPA, and Environment Protection Officers arrived to find a constant flow of fast running sewage entering Post Office Creek," he said.

"The creek was flowing strongly at the time, which helped clear the contamination, and Coliban Water pumped contaminated water from affected land. The company has since installed automatic alarms at the pumping station and the treatment plant. A pump station site management plan has also been developed."

In court, Coliban Water pleaded guilty to one charge of causing or permitting an environmental hazard, in contravention of Section 27A(1)(c) of the Environment Protection Act 1970.

The Magistrate sentenced the company without conviction, and ordered it to publish the details of the case and pay EPA's legal costs of $12,141.64.

The court also ordered Coliban Water to provide $100,000 in funding which could be used by the Dja Dja Wurrung Clans Aboriginal Corporation to conduct an Aboriginal Waterway Assessment of Post Office Creek and nearby parts of the Campaspe River.

This is the first project of this nature awarded by the courts to a traditional owner group under the Environment Protection Act 1970.