A system for aeration and separation of contaminants from flowing water in a channel, comprising: a wall (1) partially embedded in the channel of flowing water; a mesh (4) placed above the wall (1); a plurality of baffles (3, 5) partially embedded in the channel and placed opposite to each other in such manner so as to the increase the distance travelled by water; plants algae planted around and on the baffles (3, 5); a flooring (6) sloping towards flowing water direction; a sink (2) constructed at a depth lower than the flooring (6); and a water wheel (11) placed in flowing water.