Falkenstein said he estimates Just Water sells around half a million plastic cups each year.
The publicly listed company has found an alternative which is both biodegradable and compostable.
The change will result in a 15 per cent increase to Just Water's costs. The company will retail their cups at a 5 per cent increase and absorb the difference. Currently they sell 1000 cups for $60.
Falkenstein said staff at Just Water were influential in the decision to ditch plastic cups.
"We asked the staff in a questionnaire and the comments we got back were 100 per cent in support [of the move]," Falkenstein said.
Falkenstein said they won't start receiving the new stock until September and hopes its plastic cups will be phased out by October at the latest.
The company is also encouraging others to reduce their usage of single-use plastic.
"We're talking to suppliers of other things we buy and saying 'hey we don't want to buy those things in plastic anymore. What can you do to change things?'," Falkenstein said.
Just Water supplies water coolers, drinking fountains, underbench units, boiling water units and bottled water delivery all around the country.