The water agency is negotiating with the Japan International Cooperation Agency to fund the plant at Perur.
The dredging of the seabed for a 100 MLD plant in Nemmeli had caused much damage to the shoreline.
Desalination projects in the city, which have been delayed for various reasons, may soon be back on track.
The Nemmeli plant will come up with the assistance of KfW, a German funding agency.
Metrowater is confident that the project to build a 150 mld desalination plant at the existing site in Nemmeli can be started this year as environmental clearance has been obtained.