The average household’s water and sewerage bill will drop by about £17 a year in England and Wales.
Water UK, the industry trade body, said the average annual bill would fall by 4% to £396.60 from 1 April.
Its chief executive, Christine McGourty, said the water industry was “committed to giving customers good value for money”.
The regulator Ofwat said the drop was down to the fact it had “demanded greater efficiency” from firms.
Changes to bills will vary from customer to customer and depend on their supplier.
The commitment comes at the start of the next five-year “business cycle” for water companies.