It has promised to make up to 50 changes around the Saltend works in response to complaints about the so-called "Saltend stink".
Earlier this year, East Riding Council served Yorkshire Water with an abatement notice threatening to take the company to court unless it confronted the problem.
Nick Topham, Yorkshire Water’s Programme Director for East Riding and Hull, said, “We understand that the odours from our treatment works last summer were unacceptable.
"In July we committed to investing in the site to prevent it happening again. Today we are announcing a comprehensive investment plan that will deliver on that commitment.”
The news was welcomed by Beverley and Holderness MP Graham Stuart.
He said: "Today’s announcement is great news for the people of Saltend and the surrounding area who have had to put up with horrible smells from Yorkshire Water’s plant on-and-off for years.
"They deserve huge credit for campaigning long and hard to get the changes they need and I’m delighted for them."