The River Chew is now half a kilometre longer for the first time in more than half a century.
The scheme has permanently restored a section of the river and will provide a new home for endangered species, such as eels.
Matthew Pitts, Catchment Strategy Manager at Bristol Water, said: “We are pleased to be working alongside Bristol Avon Rivers Trust, The Wild Trout Trust and Greenmantle, consultants Ricardo and contractors RJ Cox, to provide a new home for wildlife.
“The European eel is actually more endangered than the blue whale and giant panda. Alongside our Spawn to be Wild scheme, which will see hundreds of eels released into our rivers by local school children next month, the river extension will help us do our bit to restore eel populations as well as provide a healthier environment for existing wildlife.
“We have relocated an outfall so that the river now starts at the end of the spillway and flows through the woods before joining the Chew Stoke Stream on its way towards Chew Magna.
“It is the first time the river has been permanently re-wetted since the 1950s. Now that historic needs for the cotton, flour and gunpowder trades are no longer needed, it means we can help do our bit for nature.”
The restoration will kick start a new collaborative Chew Catchment Project to be delivered by Bristol Avon Rivers Trust (BART) and local partners, designed to bring together local community groups in a mutual mission to protect the river for years to come.
Nearby residents will also be trained in ecology so that local people can take part and explore how the river develops as the scheme progresses. The data will then be used by Bristol Water and the Environment Agency to measure the success of the scheme.