Beronhill Limited, an electroplater, also dumped zinc and chemical oxygen demand (COD) above agreed limits.
Waste from the firm ends up at Barnhurst Sewage Treatment Works in Oxley which discharges into both the Shropshire Union and Staffordshire and Worcestershire canals.
High levels of the chemicals and metal can result in fish dying and sewage sludge having to be sent to landfill rather than recycled for agricultural use.
Barrister Mohammed Latif, on behalf of Beronhill, entered guilty pleas to two counts of breaching agreed limits on the contents of its liquid waste at Wolverhampton Crown Court.
A third count relating to the cyanide was admitted earlier this year.
Judge Barry Berlin adjourned the case until January 3 when the firm, based on the corner of Lower Walsall Street and Corser Street in Horseley Fields, will be sentenced.
Mr Oliver Willmott, prosecuting on behalf of Severn Trent Water, said it was from a sample taken on February 7, 2015, that cyanide was found at more than two-and-a-half times the agreed limit for the firm.
It was samples taken on November 11, 2015, which recorded zinc at more than two times the limit and COD at two-and-a-half times the limit.
COD is a critical waste treatment measurement defined as the capacity of water to consume oxygen during the decomposition of organic matter and the oxidation of inorganic chemicals such as ammonia and nitrite.
The court heard after the cyanide levels were uncovered the firm sought to question the results, claiming they were not using cyanide products and that the chemical must have been introduced by the sampling equipment.
Mr Willmott also explained the firm has several previous convictions concerning the levels of zinc being dumped dating back to 2007.
He said: “The company has a mechanism for dealing with its waste but it either doesn’t work very well or it is deliberately dumping.
“I don’t think the crown can say it is deliberate rather than reckless, but it is at least reckless because it has happened on so many occasions.”
Barnhurst Sewage Treatment Works treats waste from across Wolverhampton and from Perton.
Mr Willmott explained it has a ‘high zinc load’ given it takes waste from nine electroplaters.
He added: “Because of the high concentration of these firms in the area it is critical each one sticks to their limits.
"There is a risk that rather than being put to good use, sludge has to be sent to landfill.”
A Severn Trent Water spokesman, said: “We’re pleased Beronhill pleaded guilty to the charges and now await the sentencing hearing.”