The Environmental Protection Agency has promised to take legal action against local authorities unless there is an improvement in the operation and monitoring of sewerage works.
The EPA's latest report focuses on wastewater discharges from Ireland's cities and towns during 2006 and 2007.
Of the 192 treatment plants tested, 51% did not meet EU standards because they were not operating properly or were overloaded.
Read the full EPA report
At least 20 areas do not have secondary treatment, which means effluent is being released into the sea.
These include Bray in Wicklow, Killybegs in Donegal, Clifden in Galway and Kinsale in Cork.
EPA enforcement officer Dara Lynott said new licensing powers will result in enforcement action, including prosecutions, being taken against failing local authorities.
Environment Minister John Gormley said it was unacceptable that a quarter of the non-compliance levels can be attributed to insufficient levels of sampling by local authorities.