The Rachakonoda police in Hyderabad arrested three people on Friday in connection with the death of two workers near the city's Uppal Stadium.
The workers, who had migrated from Odisha in search of employment, had entered a water supply trunk line and asphyxiated due to poisonous gases inside the chamber.
It was later learnt that the workers were hired by Larsen & Toubro (L&T) to do the job, who had given the contract to SR constructions.
They were also reportedly not given any form of safety gear like masks or gloves, before entering the chamber.
Three staffers of SR constructions, identified as Srinivas, Narasimha Rao and Srinivas Rao, were taken into custody on Friday by the Uppal police.
The deceased were identified as Santosh and Vijay, daily wage labourers from Odisha, who had migrated to the city in search of employment. The two were reportedly living nearby in Chilkanagar area.
"As they entered inside, poisonous gases inside the chamber resulted in suffocation. We have retrieved the bodies and sent it to the state-run Gandhi Hospital for a post mortem," a police officer told TNM earlier.
The Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB) had taken note of the incident and ordered a probe.
Speaking to reporters, HMWSSB MD Dana Kishore announced that Rs 10 lakh would be sanctioned as compensation to the deceased families.
He also said that Water Board Technical Director Satya Suryanarayana would lead the investigation.
Last year, the Telangana government introduced 70 mini sewer-jetting machines with the intention to eliminate manual scavenging in Hyderabad.
Officials said that the machines will make the process of cleaning the clogged sewage lines easier, unlike the conventional machines.
Manual scavenging is banned under the Prohibition of Employment as Manual Scavengers and their Rehabilitation Act 2013.