The main problem presented in this paper arises from the acidic impact of the diluted venasis of the "Liquid industrial waste resulting from molasses desugarization" (LIWMD) at refinement factories. This liquid waste emerges through large areas around the reservoirs and spreads into the soil due to the presence of any defect in the tanks and connecting pipes. The (LIWMD) flows through the soil around or under foundations, and with time, reach deep distances into the soil causing many problems. The purpose of this research is to study the effect of (LIWMD) contamination on the physical and mechanical properties of fine grained soil. These properties were determined in the laboratory before and after mixing the soil with the (LIWMD). The results show that the (LIWMD) contamination has significant effect on the soil cohesion. The angle of internal friction also decreases with the increase of the percentage of liquid waste beyond 15%. Also, it has been found that coefficients of consolidation, volume change and permeability decreases with the increase of the amount of liquid waste in the soil.