Contractors started work last month on a installing a bypass system at the ponds. Pipework around the lower settling ponds will divert the city's waste directly from the upper main pond to ultraviolet light sanitisers before the waste is pumped into the sea.
Sludge from the settling pond is currently being pumped back into the main pond. Eventually the sludge will be put through augurs to wring as much water out of the sludge as possible.
It will be mixed with lime and polymers to stabilise it before it is put back into the smaller pond, covered with green waste followed by a layer of clay, and capped off.
The treatment plant has been troubled from the time it was commissioned in 2007 and problems reached a head last December, with odour from the ponds blowing over the city.
The new plant, expected to be operating by early 2015, will see any sludge removed daily.
Residential and industrial waste will be pumped into a covered anaerobic pond, then shifted into stabilisation and clarifying ponds, before undergoing UV treatment and being pumped to sea through the South Beach outfall.
Mr Hughes said once building of the new plant started in April next year, there would be no smell because any sludge would be contained within the covered pond.
The council wants to have the main contract out to tender before Christmas, with major work starting in March, 2014.