The sewer and water agency serving Montgomery and Prince George's counties has agreed to pay a $1.1 million penalty and make $200 million worth of improvements to remedy widespread leaks of raw waste, officials announced yesterday.

The agreement is meant to settle lawsuits filed against the Washington Suburban Sanitary Commission by the U.S. Environmental Protection Agency, the U.S. Department of Justice, the state of Maryland and assorted environmental groups.

These groups had complained that the commission's pipes, which serve about 1.6 million people, were allowed to deteriorate to the point that sewage could escape -- turning a system meant to quarantine waste into a hidden underground polluter.

The leaked waste "doesn't just disappear," said Rod J. Rosenstein, the U.S. attorney for Maryland, in a news conference yesterday morning. Instead, officials said, it creates a risk of disease in local rivers and worsens pollution problems downstream in the Chesapeake Bay.

The agreement was announced yesterday at the same time as a pact between regulators and Baltimore County. There, officials will have to spend more than $800 million improving the city's sewer system and pay a $750,000 penalty for not keeping pipes in better shape.

The pacts follow other agreements to improve sewage systems in the District and Baltimore -- all part of a general crackdown on aging, leaky sewage pipes. But the penalty imposed on the suburban sanitary commission was one of the stiffest anywhere, reflecting the scope of the problem in this area, a Justice Department spokeswoman said.

Sanitary commission officials said that as the system aged, it developed leaks that allowed groundwater to flow in to sewer pipes and sewer water to seep out. An even bigger problem was grease blockages -- discarded kitchen grease that congealed to cause blockages in sewer lines.

These problems caused sewage to leak out of pipes or burst out of manholes, officials said. According to a Washington Post report last year, more than 130 million gallons of raw waste -- about 26 times the volume of the Tidal Basin -- escaped the system over two years.

"This is a powerful example of the importance of maintaining sewers," said Benjamin H. Grumbles, an assistant administrator at the EPA.

Yesterday, officials from the suburban sanitary commission held their own news conference near the banks of the Anacostia River in Bladensburg, where they described plans to upgrade the system over the 12-year timetable set out in the agreement. They estimated that they would spend as much as $150 million more than the amount required in the agreement.

The promised improvements include the inspection of more than 3,000 miles of sewer pipes, many of them with the aid of closed-circuit TV cameras, plus new water-quality testing in area streams.

In addition, the commission promised to inspect "grease-abatement equipment" at 5,000 restaurants in five years.

The suburban system has started to show signs of improvement, said Robert Boone of the Anacostia Watershed Society. Two years ago, he said, it took the commission eight days to respond to a sewer pipe leaking waste into Sligo Creek. Recently, he said, the response time was within 12 hours in similar cases.

But yesterday's riverside news conference provided a sign of how much work remains. On a nearby flagpole, below the U.S. and Maryland flags, was a yellow banner that signaled that fecal coliform bacteria in the river was higher than acceptable levels.

U.S. Rep. Chris Van Hollen (D-Md.) said he looked forward to the time when, "on a hot day like today, people can come down here in their bathing suits and not have any concern about jumping right in."

Staff writer Matthew Mosk contributed to this report.

WSSC technicians Gregory Evans and Thomas Williams demonstrate a camera that can be run through pipes to find clogs, which they can then clear with a "snake."