The increase will take into account an inflation rate of three per cent and will mean a total average bill of £388 in 2013-2014, the regulator said.
The changes will come into effect on 1 April and apply until
31 March 2014, and bills will vary for each household depending on their water supplier and whether they have a water meter.
Ofwat's chief executive Regina Finn said she understood there was huge pressure on household incomes driven by inflation.
So far, however, average bills have stayed broadly in line with inflation and are 10 per cent lower than what companies asked for.
“We will make sure customers get value for money, and if companies fall short in delivering their investment promises, we will take action,” she added.
Ofwat data showed the highest water and sewerage bills in the country continue to be from South West Water, with households paying an average £499.