Severn Trent Water has promised to spend £30,000 to help get rid of the bad smell from a sewage treatment site near Quedgeley.
A letter from the water company has been sent to Quedgeley residents explaining its plans to help reduce the odour from the Netheridge Sewage Treatment Works in Hempstead Lane.
It said that tests showed that the odour control units on the imported sludge and sludge blending tanks at the site were 'not working as well as they could'.
The company will therefore be spending £30,000 on improvements to the works, including refurbishing the sludge tanks.
A spokesman for Severn Trent Water said: "We're working hard to reduce the odour we sometimes have at our sewage treatment works in Netheridge.
"Over the last few months we've been investigating opportunities to reduce the smell and its impact on our neighbours.
"We've carried out a full assessment of our treatment works, and in October last year we met with Gloucestershire County Council's environmental health department and local residents to share our findings.
"Since then we have been looking at new ways to store the treated sewage we have at the works, before sending to farmers for them to use on their land.
"We'd like to assure everyone that smells from our treatment works does not have any risk to health.
"We're in regular contact with our local neighbours and customers to keep them informed on what we're doing, and we've had some really positive feedback from everyone, who are all keen to work with us to improve the smell in the local area."
Cllr Mark Hawthorne (C, Quedgeley) leader of Gloucestershire County Council said: "This is great news for Quedgeley as local residents have been raising this issue for a number of years.
"I'll keep a close eye on developments and hope that this investment will solve the problem."