There was concern the discharge could get into the Clwyd Estuary and affect nearby beaches.
But the agency said emergency work by DÅµr Cymru Welsh Water through the night had been successful. It is believed 70,000 litres of sewage was removed.
Damage to a football pitch is being examined to see what can be done to bring it back into use.
The agency said in a statement: "Environment Agency Wales officers can now confirm that due to the response by DÅµr Cymru Welsh Water, the Clwyd Estuary has been protected from any discharge of sewage.
"Emergency work by the company to repair the sewer pipe has been successful with operators working through the night.
"This work has been successful and the main is now operating as normal.
"The company stored large amounts of sewage at a holding site while the repairs took place."
Bill Darwin, from Kinmel Bay and Towyn Community Association, which looks after the pitch, said he understood the football field would not be usable for some weeks.
"It was a major spillage," he said. "It was like a lake - you couldn't see half the pitch."
The pitch is used by a number of local teams including Sunday league pub team May Quay, who were  due to play at home this weekend, and Towyn Juniors FC.
"We're gutted," said a May Quay team spokesman.
A burst pipe which caused a major sewage leak at Conwy has been repaired, says Environment Agency Wales.