Raw sewage still being discharged into waters in 38 areas
Wastewater from the country's two biggest cities is failing to meet treatment standards, damaging the environment and posing a health and safety risk.
And the Environmental Protection Agency (EPA) says raw sewage from the equivalent of 88,000 people living in 38 towns and villages continues to flow into waters every day.
Despite a "legacy of under- investment" and the State facing legal action from the European Commission for failing to meet mandatory standards, the EPA says improvements are not happening at a fast enough pace.
"It is unacceptable that, 13 years after the final deadline to comply with treatment standards, there are still large towns and cities discharging inadequately treated sewage that fails to meet these standards," director of the EPA's office of environmental enforcement Dr Tom Ryan said.
"This is putting our health at risk and is having an impact on our rivers, lakes and coastal waters."
The Urban Wastewater Treatment in 2017 report shows that wastewater generated in 28 large towns and cities - which accounts for more than half of the total sewage collected - failed to meet mandatory standards. These areas include Dublin, Cork, Arklow and Tralee.
Ireland was supposed to comply with the required standards by 2005, and is currently before the EU Court of Justice for breaching these requirements.
Some 38 towns and villages are also discharging raw sewage, including Roundstone and Spiddal in Co Galway, Kilmore Quay in Co Waterford, Falcarragh in Co Donegal and Castletownbere in Co Cork. Irish Water has been prosecuted for delays in providing treatment in six of the 38 areas.
In another 57 locations, wastewater discharges are the only environmental threat to rivers, lakes and coastal waters.
Upgrades are required to protect four beaches across the State, including Clifden in Co Galway and Merrion Strand, Loughshinny and Sandymount Strand in Co Dublin.
There are also risks to freshwater pearl mussels and shellfish habitats, while 13 sewer networks also need to be upgraded.
The report says that Irish Water has made progress in reducing the number of priority areas where treatment needs to improve, down from 148 to 132.
In addition, the number of areas not meeting the EU directive fell to 28 from 40, while investment in upgraded and new treatment plants is yielding results.
But the EPA said a "substantial increase" in investment was required to provide the necessary infrastructure.
In addition, Irish Water needed to improve its understanding of the condition of sewers to help focus upgrades to where they were most needed.
Head of asset management at Irish Water, Sean Laffey, said it had built or upgraded 55 wastewater treatment plants at 55 locations across the country since 2014.
He said the utility focused investment on areas not compliant with European standards and where raw sewage was being discharged. Admitting that progress had been slow in some cases, he insisted it had a plan to deal with non-compliance.
"In some cases, progress has been slower than we would like due to complex conditions, planning and other issues, but Irish Water has a plan for every area," he said. "The size and scale of the challenge we have faced has been considerable, but we have developed solutions to support the safe return of wastewater to the environment."