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.Source: Ananova
