This option, the one presented to councillors on Tuesday as the preferred option, is estimated to cost $3.1m, over a second stormwater mitigation option which would have cost $1.5m.
Three Waters manager Brett Chapman, who presented the report to council, said that "we didn't intend that it [the filled part of the lake] would be a park, it was just a suggestion.
"I think it is probably fair to think about the design of that 25 per cent area and also look at investigating a range of options for how we might best utilise that land. There is a range of opportunities there.
Councillor Simon Nixon said it was a "long time coming" and questioned if the action was still appropriate to be included in the 2020/2021 year or if it should be put in year two of the long-term plan
Chapman said the council needed to be moving on it now, as engineering of the pipe network, and detailed design and construction could take upwards of two years to complete.
"We need to commit funding now to enable us to work through that time frame."
Councillor Bayden Barber said the cost of the development for the city had come at the worst time.
"It's a legacy problem, it's a whole lot of councillors that haven't done their job and we're left to pick up the bill."
He said the best outcome would be if the council could find alliances with the government and regional council.
Deputy mayor Tania Kerr echoed the need to "build a partnership" and seek external funding.
Funding of $2m has been proposed for the project as part of the annual plan.
The council added a third recommendation in addition to receiving the report and approving option one that:
"The council request the chief executive investigate a range of options for the future use of the site as part of the detailed design, and investigate options for other sources of external funding".
Mayor Sandra Hazlehurst said work had been ongoing on for several years to determine the risks surrounding the stormwater, and that the status quo was not an option.
"Significant changes to government legislation are coming that mean such upgrades will be necessary and by doing this work we can sort this out and future-proof this stormwater system.
"This kind of issue is something that is going to be part of our long term plans of the future – it's not just Lowes Pit, it's other areas that will have to be included in future budgets.
"We are taking the opportunity now to protect this area environmentally and enhance it for the community."