The developer appeared at Leeds Magistrates Court on Monday November 23 where the company pleaded guilty to polluting a tributary of Grimescar Dyke with silt at Lindley Park in February 2018.
The business was fined £200,000, ordered to pay costs of more than £8,500 and a victim surcharge of £170.
The court heard that Miller Homes purchased the land for a residential housing development in 2012. The site includes a series of tanks and lagoons for flood prevention measures.
Following reports of discolouration of Grimescar Dyke, an Environment Agency investigation traced the source of the silt pollution to an underground tank on the Miller Homes site.
Miller Homes said they had the site drainage infrastructure cleared by a contractor and this activity could have potentially impacted on the discharge from the tank.
The silt discharge impacted Grimescar Dyke for at least 1.2km. Silt pollution is hazardous to fish, blocking their gills and damaging breeding grounds. It can also damage the habitats that aquatic insects, vital food for a number of species, depend on.
The Environment Agency's management team leader Andy Swettenham said: "Miller Homes Limited did not follow its own management procedures, put in place after a previous conviction. Their own procedures dictate that the site should have a site specific environment plan and associated surface water management plan. These plans did exist but were not sufficient to prevent the pollution.
"This case emphasises the need not only for companies to have a comprehensive water management and pollution prevention plan in place but also to ensure it is fully implemented and all activities on site are properly supervised and monitored.
"If a member of the public had not reported this to us then the impact of the pollution could have been far worse."
Miller Homes was previously fined £100,000 in 2016 for a similar offence in 2013 at the same site, after which it developed its companywide management procedures.