The project is expected to reduce flooding in lower areas of the River Nyando, and supply water for domestic use, irrigation and hydroelectricity.
Work on the project, which is funded by the government, is open for international bidders, while Kenyan contractors will supervise the construction of the first phase.
Mr Okebe expressed confidence that the project will end perennial flooding in the Nyando and Muhoroni areas.
Kisumu Governor Anyang’ Nyong’o noted that, when completed, the project will provide a long-term solution to the flooding and provide clean water to residents.
“We have instructed the contractor not to continue with the work because we don’t want to continue delaying this strategic project,” he said, adding that the government will ensure it is completed soon.