Australia's first scheme to recycle sewage for drinking water will be operational by the end of the year in Perth, the state has announced.

Water Minister Mia Davies said the "Groundwater Replenishment Scheme" would inject 14 billion litres of wastewater into the Gnangara aquifer after advanced purification at the Craigie treatment plant.

The $51 million plant started operating on a trial basis in 2010 and a three-year trial was declared a success in 2013. Construction of the official scheme began in 2014.

Ms Davies also announced the government would begin work early next year to duplicate the Craigie plant and double the scheme's capacity to 28 billion litres annually.