The interceptor will duplicate part of the ageing western interceptor and provide additional capacity to cater for the growing population.
Watercare also intends to build a smaller "waterfront interceptor", at a cost estimate of $135 million, to reduce spills from the 50 overflow points in Grey Lynn and the waterfront suburbs from Coxs Bay to Freemans Bay.
Separation of combined wastewater/stormwater systems is still done in small, localised projects, but it is no longer seen as the main solution to overflows, a mantle which has shifted to the interceptors and, in some areas, large storage tanks.
A Watercare spokesman said Metrowater and the council completed many sewer separation projects, but wastewater sewers in those areas "still exhibit continuing features of combined sewers ... It is difficult to effectively and fully separate combined sewers".
Because of the huge and complex nature of the central interceptor project, it is expected to take until 2023 to complete and its associated works until 2027 - more than a generation after communities began expressing their distaste for waterway pollution.
Friends of Oakley Creek chairwoman Wendy John said the reduction in overflows would be welcome, but did not deal with the decreasing amount of land surface in the city that could absorb rainwater.