Environment ministry has tasked an Indian company to establish sewerage systems in Th Veymandoo and Lh Naifaru.
The contract also requires the company to develop a clean water system in Naifaru.
Environment ministry said the project will cost MVR 148.9, and will be completed within 18 months.
At the agreement signing ceremony on Sunday, environment minister Thoriq Ibrahim said the water system in Naifaru will be developed with the help of OPEC Fund, and that the sewerage systems in the two islands will be developed using a loan from the World Bank.
He said the current administration is working to provide high-quality basic services to inhabited islands, especially those with large populations.
He added that the previous administration was negligent in this regard.