Small mountains of the black bags have been appearing at several sites near the Tahuna wastewater treatment plant in Dunedin.
Council water and waste services manager John Mackie said together the bags contained about 10 million pieces of "plastic and air" costing $4 million.
Each bag held about 90 pieces of the plastic, purpose-built for padding in Mosgiel before being bagged, he said.
The bags would eventually fill two giant circular filter tanks to be built by September as part of stage two of the Tahuna plant's upgrade, Mr Mackie said.
The tanks - with a combined volume of 10,000 cu m - would then serve as a trickling filter system.
Effluent would be poured into the tanks from a moving irrigator above and trickle down over the bags, the padded surfaces of which would provide a home for algae to grow, he said.
Over time, the algae act as a biological filter by consuming nutrients from the wastewater as it ran over the bags.
The plastic shapes inside the bags served to maximise the surface area available for the liquid to flow over as it passed through the filter process.
The result was cleaner, lower-nutrient liquid coming out of the tanks at the bottom, which would then be subjected to ultraviolet disinfection before being pumped out to sea.
The contract for the plastic work was let to Veolia and then subcontracted to Simaplas, which was using workers in Mosgiel to manufacture and bag the plastic pieces, Mr Mackie said.
The work was part of the $75.8 million second stage of the plant's upgrade, which is due to be completed by September 1 when existing Otago Regional Council consents - allowing chlorination to disinfect wastewater - expired.
Chlorination would not be permitted under new ORC consents issued after that date, Mr Mackie said.
