A method and apparatus for providing sanitized water in a cabinet and spigot type bottled water dispenser features an ozone generating system to generate ozone for sanitizing the water. Ozone is generated and collected within an ozone generator housing. A blower transmits air to the ozone generator housing. The air carries the ozone that is generated through a flow line to an air diffuser that is positioned upstream of the spigot (or spigots) used to dispense water. In one embodiment, a valve that is activated on the spigot to dispense water also activates the blower and ozone generator. In other embodiments, a flow sensor activates the ozone generator and blower. Various spigot and flow sensor arrangements are disclosed as a part of the overall apparatus and method.