The mayor of Whanganui says the council has been told the city's faulty wastewater plant can be salvaged, but needs costly upgrades.
The council commissioned engineering firm BTO Cardno to look at how to fix the wastewater plant, built in 2005, which began emitting a strong odour in December last year.
Mayor Annette Main said the report confirms the plant isn't operating as it should, and never would have done what it was supposed to do, but it can be modified to function properly.
The report says the existing infrastructure can be salvaged, she says, though this will be costly.
"We just have to bite the bullet and deal with it. Yes, it is going to be expensive, and yes, I wish it was money we didn't have to spend but we need to sort this."
Ms Main says it is not yet known whether the council can sue those responsible for damages.