The monitors will provide real-time data on network performance, helping to prevent flooding and pollution. A dedicated team of 15 will use the data to proactively address issues.
A new online map will allow the public to view near real-time information on overflow activity in their area.
Professor Simon Parsons, Scottish Water's Director of Environment, Planning and Assurance, said the monitors and map are key milestones in improving Scotland's water environment.
The investment comes as climate change leads to more extreme rainfall and increased pressure on the sewer system. Overflows act as a relief valve to prevent flooding, but they can contribute to pollution if not managed effectively.
Scottish Water's new map responds to calls for greater transparency on overflows and will help inform future investment decisions.
Professor Parsons, commented: "It's been important to ensure that the development of this new service has taken the views of our customers and stakeholders into account. We've worked with several external groups on the design and the supporting information, so I'm pleased this has been a really collaborative process. We'll continue to work with partners and customers to build on the initial launch."
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Acting Cabinet Secretary for Net Zero and Energy, Gillian Martin, said: "I'm delighted Scottish Water has delivered on its Improving Urban Waters Routemap commitment to install 1,000 new overflow monitors by the end of this year.
"Our waterways are in good condition. SEPA classifies 86.5% of our water environment as high or good quality. This is up from 82% in 2014 and the sustained investment made by Scottish Water across the period 2015-21, has been a key driver of the improvement. This built on the significant investment delivered in relation to the treatment of wastewater since Scottish Water's formation in 2002.
"However, we are not complacent and want to see this improve further. Scottish Water's routemap sets out £500 million of investment it will make to improve the quality of our waterways and enhance monitoring of the sewer network. I'm delighted to see this being delivered and it shows what can be achieved when water is kept in public hands and profits are put back into operational improvements and not into dividends for shareholders."
Calum Duncan, Head of Policy and Advocacy at the Marine Conservation Society, said: "We are pleased to see Scottish Water fulfilling its commitment to install 1000 monitors this year. We have been calling for years to increase the monitoring of Scotland's combined sewer network to 100%, as well as making information on sewage discharges as transparent and easy to find as possible. Whilst there is still a long way to go, these new monitors are a welcome step towards that target."
Professor Parsons added: "It's a reality of climate change and the loss of green spaces that increased rainfall is overwhelming our waste water system much more frequently than in the past. This means our existing network of overflows is vital to protecting homes and businesses.
"We're working tirelessly to ensure these operate in the best way possible and do their job during heavy rain to protect customers, the environment, and water quality.
"We can't change our waste water system overnight. That would cost billions and mean digging up whole communities. We are working hard to make sure new housing developments don't need overflows by using sustainable drainage systems that bring back green spaces and nature to our urban environment.
"In the meantime, the new monitors and map will increase our understanding of how our system operates and where new investment is best targeted. We are taking our customers and stakeholders on this journey with us as we improve our knowledge and invest wisely to make Scotland's sewer system better and more able to cope with the extreme weather conditions we often face."
