A South Korean government commission will probe a $20 billion effort to dredge, dam and beautify four major rivers that has been tainted by charges of environmental damage, cost-overruns and corruption.

A statement from the Prime Minister's Office on Friday said 20 officials and experts would be drafted onto the commission which will begin its work next month.

Revitalising the Han, Nakdong, Geum and Yeongsan rivers was the centrepiece of former president Lee Myung-Bak's "Green New Deal" -- aimed at creating jobs after the 2008 global downturn.

Started in 2009, the 22.2 trillion won ($20.1 billion) project saw the construction of 16 weirs and dams along the four rivers that were straightened and dredged to improve water quality and prevent flooding.

In January this year, a report by the state auditor said the work was riddled with structural flaws, which would lead to a deterioration of water quality and require excessive maintenance costs.

Speaking to reporters on Friday, Environment Minster Yoon Seong-Kyu, said a spike in the spread of toxic algae had been noted last summer.

"It's feared this phenomenon could last for a considerable time", Yoon said.

President Park Geun-Hye had promised a thorough review of the project in March, just weeks after taking power.

State prosecution authorities have launched a separate probe into allegations that several local construction companies colluded to win a bid for the project.

The auditor's report raises doubts over South Korea's plans to export the project to countries including flood-prone Thailand, Morocco, Algeria and Paraguay.