Queensland Urban Utilities is the first of three council-owned companies set up to provide water to all ratepayers in South East Queensland.
Two other entities have to be formed by July 2010 to sell water from the water grid.
The second will sell water to ratepayers on the Sunshine Coast and Moreton Bay council areas north of Brisbane,and the third to ratepayers in the Redland,Logan and Gold Coast areas south of Brisbane.
Queensland Urban Utilities chief executive Noel Faulkner,who worked with electricity utilities in Victoria and Central Queensland before joining Brisbane City Council in 1999,explained the new organisation.
"The issue is not so much whether it is more effective,the issue is that the local councils will no longer be responsible for the distribution and retailing of water and wastewater services,"Mr Faulkner said.
"It will be jointly owned by the five councils but it will have an independent board,"he said.
Mr Faulkner said councillors could not serve as board members.
Legislation to go before State Parliament by July 2010 will give the new-look organisation the ability to receive money from developers,Mr Faulkner said.
Queensland Urban Utilities will have to set up a Water and Wastewater Services Plan under those laws.
"That plan has to identify where and when new infrastructure is required and urban utilities will be required to make sure that the provision of that infrastructure complies with the SEQ Regional Plan and also the land planning schemes that the various local governments have in place,"Mr Faulkner said.
"And that plan has to be signed off by the minister."
Last year the affected councils were all paid compensation for the loss of their revenue and assets.
The sums ranged from $880 million for Brisbane City Council and $512 million for the Gold Coast City Council to $46 million for Ipswich,$3.3 million for Gatton and $8.8 million for the Esk-Gatton-Laidley Water Board.
The massive switch for ratepayers was first announced by the Queensland Water Commission in May 2007.