The Chirk-based company breached its consent to discharge trade effluent and making an unauthorised discharge into the public sewer network.
Welsh Water brought the prosecution after the incident during June 2018.
Kronospan pleaded guilty to both offences and was also ordered to pay almost £48,000 of costs for the case which was heard at Wrexham Magistrates Court.
Magistrates heard that Welsh Water launched a major investigation following the discovery of high levels of ammonia coming in to the Five Fords Wastewater Treatment Works near Wrexham.
Kronospan Ltd were identified as the source of the problem, which lasted from June 8 to June 18.
Samples taken at the Kronospan site in Chirk showed significant breaches of the company’s consent to discharge trade effluent. Welsh Water officers also witnessed an unauthorised discharge into the public sewer during a site visit.
Steve Wilson, Welsh Water’s managing director of waste water services said: “Bringing a prosecution such as this really is the last resort as we will always try and work with our business customers before reaching this stage.
“We have a duty to ensure that we protect our network from abuse. Damage can be costly to repair which ultimately would be passed on to all of our customers. Breaches of consent to discharge trade effluent and unauthorised discharges could also pose a very real public health and environmental risk."
A spokesperson for Kronospan apologised for the incident and said changes have been made.
She said: "Kronospan is extremely sorry for the incident in June 2018 when we were carrying out plant cleaning activities, which led to accidental seepage into the drainage network, which had a minor impact on water quality.
"This was caused by human error during a time when significant construction work was taking place alongside our normal operations.
"When this issue was first identified we cooperated fully with Welsh Water and took immediate action to make sure that there was no further impact.
"Since this incident, the site has now changed substantially and equipment has been updated to future-proof the site."