The company called Tethys already has a contract with the city, which gets its water from the Skagit River.
KUOW reports the plant would use up to 5 million gallons of water a day, making it one of the largest water bottling plants in the country.
A city council vote Monday moved the process forward. Anacortes Mayor Dean Maxwell says the bottling plant would bring needed revenue to the city.
A land use application for the plant is being considered by Skagit County.