The regeneration of Stane Gardens in Shotts, North Lanarkshire, starts on January 13.
North Lanarkshire Council and the Scottish Environment Protection Agency (Sepa) have approved plans to clean up historical contamination and improve the physical water environment at the site.
As reported by the Evening Times, tests carried out by the council showed the land was heavily contaminated as a result of its industrial past, and the area has been fenced off to protect public safety.
The first phase of the remediation work was completed earlier this year when the most contaminated soil from the southern end of the site was removed.
The South Calder Water has been changed physically by historical activities and development.
As a result, part of the water course is a straight, concrete channel.
The improvements made during this work will return the river to a more natural form, stopping water being contaminated as it flows through the existing underground culvert.
Councillor Helen McKenna, convener of the council's Environmental Services Committee, said: "Since we discovered the contamination at Stane Gardens, the council has worked closely with Sepa to identify the best way to clean up the site and make it safe for local people.
"We appreciate this has taken some time but we are confident the action plan agreed will ensure Stane Gardens is safe for local people to use.
"As well as cleaning up the site, the investment from SEPA means we can also create an attractive local facility for everyone to enjoy.
"It will be a lasting legacy for the community of Shotts."
In 2012, the Evening Times reported how the clean-up operation could eventually cost anywhere between £500,000 and £4m.
In January, contractors VHE will cover the whole site with an impermeable material to contain the contamination.
A layer of soil will then be laid over this material. The capping material also prevents clean rainwater getting into the soil, becoming contaminated and then finding its way into the deep groundwater and nearby watercourses, including the South Calder Water.
This work is expected to take seven weeks and the site will then be landscaped, seeded and trees planted.
Following this the South Calder Water will be restored from Burnbrae Road eastwards.
The concrete channel and part of the culvert will be removed and a winding channel, reflective of a natural river, will be reinstated.
The bed will be replaced with gravels, rather than concrete.
The council will contribute £1.5m to the project, with another £1.5m from Sepa's Water Environment Fund and £450,000 from the Scottish Government Vacant and Derelict Land Fund.
Calum MacDonald, Sepa executive director, said: "This work will help to improve biodiversity and ecology across this section of the river, which will transform a derelict, contaminated site into a living green space for the people of Shotts."