The deal comes in response to Government moves to open the business retail water sector to increased competition.
Andrew Wyllie, Chief Executive of Costain, said “Severn Trent Costain will help customers to manage their water and waste water usage in the most efficient, compliant and cost-effective way.
“Increasingly, customers are looking for a single expert provider who can help plan and manage their industrial water and waste water use across the full cycle.
“We are delighted to be working with Severn Trent to bring our combined expertise in consultation, construction and asset management to bear on this vital issue.”
Tony Wray, chief executive of Severn Trent said: “Together with Costain we will take the initiative in opening up the UK market for business retail competition.”
Severn Trent Costain will enable customers to combine their requirements for on-site water services with the opportunity to buy their water from a single national supplier.