The work has been fast-tracked in the wake of the June weather event last year and it will increase the council's overall rates bill by 0.3 per cent in the 2016-17 year, which will cover interest and loan repayments for the work.
Council engineers said during "unusually large" rain storms water will still follow overland "flow paths", which are the predictable paths excess water takes towards the river.
But council says the work will ultimately enhance economic growth in Whanganui because it will provide improved infrastructure for commercial properties in the Mill Rd area and residential properties in Titoki St and Rogers St.
Once the new stormwater pipes are in place, other properties in the area will be able to connect to them. But engineers warn that most of the improvement in stormwater drainage won't be apparent until the project is completed.