The state is withdrawing its demand that a new $20 million water treatment facility be built for the Lansing-area community of Charlotte.
The Lansing State Journal reports the Michigan Department of Environmental Quality's decision comes more than a year and a half after department officials said tests showed that the city's water supply was contaminated by surface water from the Battle Creek River.
The DEQ now has agreed that the city's drinking water is safe following a $100,000, city-financed study.
Building a new facility would have prompted an increase in water bills for Charlotte's about 3,800 customers.
Meanwhile, the city says it will pay about $150,000 to replace its oldest well, built in 1946. A sample taken in August 2012 had abnormal levels of algae.