Average household water bills in England and Wales will rise by 11.8%, or £29, from Friday.
Water bills will rise so providers can meet environmental standards
The inflation-busting increase was approved by the industry regulator Ofwat to help pay for water infrastructure improvements.
Water companies are set to invest £16.8bn over the next five years.
Consumer group Watervoice has condemned the price rise as likely to hurt poor households and more beneficial to water company shareholders than customers.
The regulator said that higher charges would enable water companies to make further improvements to the quality of drinking water quality and to the environment, as requested by the government.
"We know that these increases will be unwelcome," an Ofwat spokesman told BBC News.
"But the bills are going up no more necessary to protect the progress that companies have already made to customer services, drinking water and the environment."
Despite the increases for 2005/06, Ofwat said that many households' water and sewage bills will still be lower in real terms than they were in 1999 - before Ofwat introduced a 12% reduction in bills from April 2000.
Maurice Terry, Watervoice chairman, said that the price rise was more bad news for consumers.
"Customers are besieged by rising bills for energy, council tax and other services and sharp increases for water and sewerage could be the last straw.
"The upward trend in the share prices of water companies indicates that the impending price increases are seen by the City as more favourable to investors than customers."
Mr Terry added that the prices rises would hit low income consumers hardest.
Back in December, Ofwat said that water bills would rise by 18% by 2009 before inflation is taken into account.
Once inflation is factored in bills could rise by a greater amount.