Delivered by alliance partner amey-binnies, the project replaces and upgrades sections of the existing sewer network.
Georgina Reid, Scottish Water's corporate affairs manager for the west said: "Sewer flooding, particularly internal sewer flooding, is a top priority for us.
"Its impact in both a practical and an emotional sense can be devastating so I am delighted we can make a real difference in an area that has suffered from the problem in the past.
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"We are investing many millions of pounds up and down the country upgrading and modernising our waste water network for the benefit of our customers and their communities.
"I would like to thank everyone involved in the project for their hard work and dedication and to residents and road users for their patience and understanding."
Works took place along Claredon Place, Springfield Terrace, George Street and through the field behind Hillside Avenue.
Surface water drainage in Argyle Way has been improved and the stone dyke wall in George Street has been rebuilt.
All the main sewer works have now been completed and final reinstatement and tidying up is now underway.
Project manager Scott Ferguson said: "Amey binnies would like to thank the locals in Dunblane for their patience and understanding throughout the project.
"It has been a challenge at times but we managed to work together with Stirling Council, the community council and Scottish Water to deliver the project that will benefit everyone in Dunblane."
