Irish Water has withdrawn its current planning application to extract some nine million gallons of water a day from Killinure Lough, Lough Ree.
The State agency has announced that "additional environmental and technical surveys" have resulted in a number of design changes to the scheme.
The design changes primarily relate to the realignment of the pipeline route for the scheme.
As a result, Irish Water said it had withdrawn the planning application in order to accommodate these design changes.
However, today's statement stressed: "Irish Water will be submitting a revised planning application to incorporate these changes in the coming months.
"The revised application for the scheme will still have the capacity to treat and supply the current and future water supply demands of Athlone."
The planning application initially lodged in December 2017 sought permission for two major pieces of infrastructure at Portaneena, Killinure.
Plans for a raw water intake works and water treatment plant follow planning approval granted for the water extraction by An Bord Pleanála in 2007.
However, there have been significant local protests against the plan, in particular opposing the extraction of water from Killinure Lough, an inner lake of Lough Ree.