Bolton Crown Court also ordered both companies to pay a total of £45,262 in costs following a prosecution by the Environment Agency.
The court heard how KMI+ was contracted by UU to carry out improvement works at Wayoh water treatment works at Turton Bottoms.
In December 2013, as part of the works, KMI + emptied and removed a tank which had been used to store sodium hypochlorite in 10% solution.
Sodium hypochlorite is used in the water purification process and is also the principle ingredient of household bleach. It is very corrosive and is highly toxic to aquatic organisms.
The Honorary Recorder of Bolton, Judge Timothy Clayson, heard that by 4 December 2013 the majority of the contents of the tank had been removed but up to 300 litres of the highly toxic chemical was left in the bottom and needed to be emptied.
Counsel Richard Bradley, prosecuting on behalf of the Environment Agency, told the Court that instead of pumping or siphoning the remaining liquid out, a decision was taken to put a hosepipe into the tank and dilute the sodium hypochlorite with water, letting it overflow into a bunded area and leave the hosepipe running unattended overnight for 15 hours.
This was carried out without any risk assessment or method statement.
Neither company had surveyed the drainage adequately and did not realise there were faults in the drainage system which meant the diluted toxic chemical entered the surface water drainage system and discharged to Bradshaw Brook, a trout spawning ground.
On December 6 2013, the Environment Agency was alerted by a member of the public who had found dead fish floating in the water.
A 1.7km stretch of the brook leading towards Jumbles Reservoir was so badly polluted that virtually all aquatic organisms, including fish, shrimp and earthworms were killed.
Up to 900 dead fish were recovered, including Brown Trout, Loaches and Bullheads, but the number killed is likely to be much greater.
At the end of June 2014 the brook had recovered sufficiently for restocking to take place and UU paid for the brook to be restocked with native fish from the downstream section.
Both UU and KMI+ pleaded guilty at the first available opportunity and cooperated with the prosecution.
The Honorary Recorder of Bolton, Judge Timothy Clayson said the incident had arisen through senior management failings to ensure proper system and procedures were in place.
Gordon Whitaker, Environment Manager of the Environment Agency, said: “This was a serious and avoidable pollution incident caused by the negligence of both parties.
“It took several months for Bradshaw Brook to return to a healthy state and even then it was necessary to assist this process by restocking fish in the affected stretch.
“This case should bring home the message to all company directors and shareholders that environmental offences are taken seriously both by the regulators and the courts.”
