AWG is to return £500 million to shareholders under a financial restructuring that will see its core water supply division funded by debt rather than equity.
Around 75,000 investors will receive 1.77p for every ordinary share they hold in the Huntingdon-based business.
The group has decided to ringfence its water business to help reduce costs and provide more headroom under regulator OFWAT's price controls.
A total of £1.76 billion worth of debt has been raised on the bond market to fund the water operation, which supplies around 5 million customers.
AWG says £877 million of the funding is being used to repay short-term loans, while £205 million is being kept as a liquidity reserve.
Analysts had expected the group - formerly known as Anglian Water - to pass back between £400 million and £600 million.
The cash return will require a court-sanctioned reduction of capital, and AWG says the payment should be made in October.
Shareholders will then hold a slimmed-down stake in AWG's deregulated arm, centered on two main divisions - utility and government services.
Chairman Robin Gourlay says the group's trading performance in the first quarter was in line with expectations and adds: "The board is confident of the outlook for the year."
Today's AGM was told that Gourlay has decided to retire, and he'll be replaced by non-executive deputy chairman Peter Hickson.