Thousands of fish died after raw sewage escaped into a stream for up to 20 hours.
Southern Water has been fined a hefty £330,000 for the blunder after failing to respond to an alarm set off by faulty equipment.
Scores of brown trout and other dead fish were discovered – totalling 2,000 deaths.
The water company was sentenced at Southampton Magistrates’ Court after pleading guilty to a breach of environmental regulations.
The case regarding the pollution and operation of Little Bull pumping station was brought forward by the Environment Agency.
The deadly leak on July 21 2019 spilled untreated effluent into Shawford Lake Stream in Waltham Chase, near Bishop's Waltham.
But the damage did not stop there as the sewage flooded fields, crossing into the site of the YMCA Fairthorne Manor activity centre.
The centre had to cancel 1,000 bookings with no water sports taking place for 10 days, for which they were compensated.
According to the Environment Agency, the incident was a result of a pump failing.
A spokesperson said: “When a second one wouldn’t start, sewage and other hazardous substances were diverted up through two manholes, across fields and into Shawford Lake Stream, leading to the popular YMCA Fairthorne Manor.
“In the days after the incident in July 2019, investigators from the Environment Agency found pools of dirty water and polluted matter and vegetation in local fields.
“The stream was cloudy as pollution spread across nearly 3km.
“Ammonia levels in the water were 25 times the legal limit.”
Richard Manning, general counsel and company secretary for Southern Water, said: "We are very sorry that this unacceptable historical incident in 2019 led to environmental damage.
"As soon as we became aware of this event, we took action to reduce its impact on the local area, and have since co-operated fully with the Environment Agency’s investigation, pleading guilty at the first opportunity.
"In acknowledgement of our role, we have already compensated the YMCA and set up a £140,000 grant scheme with the Groundwork South Trust to aid habitat improvement.
"Learning from this incident also led to a comprehensive review of our more than 3,000 unmanned pumping stations to ensure those at highest risk were fit for purpose, leading to a rolling programme of improvements to equipment and monitoring technology which has already cost more than £13 million.
"Almost five years on from this incident, we now have a new leadership team and shareholders, and are continuing to deliver our landmark Turnaround Plan at pace - ensuring improvements are achieved across the board, including in tackling pollutions which have been slashed from 430 in 2019 to 358 last year and a further dramatic drop is due to be announced shortly.”
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here