A compulsory purchase order is needed to advance the proposed Kilcummin Sewerage Scheme.
Minister of State at the Department of Tourism and Sport Brendan Griffin says Irish Water has confirmed it has not been possible to acquire the land needed for the proposed scheme.
The Kilcummin Sewerage Scheme was originally given the go ahead in 2007; a contractor was selected but a problem developed and the funding was pulled.
In 2017, a planning application was lodged with Kerry County Council for the €3 million project, which includes a new pumping station, a holding tank, and an access road.
Planning was granted later that year, subject to conditions.
The delay in the scheme has led to hold-ups in improving the Killarney-Kilcummin road and to planning permission being refused for houses in the area.
Following queries from local representatives in recent years, Irish Water previously said it had hoped begin construction in 2020.
Junior Minister Brendan Griffin says the utility company had been trying to progress the scheme to tender and construction, however, it was not possible to secure the required lands.
Irish Water will now proceed to acquire the lands needed through a compulsory purchase order process, which will be published in the coming weeks.