"It has been a battle," Watson said.
Council staff have visited Koitiata on more than one occasion, Horizons' strategy and regulation manager Nic Peet said.
He did not agree with Gray's view of the situation, and said the lagoon was habitat for rare and threatened species.
Whanganui ecologist Peter Frost said the lagoon level fluctuates a lot and it is home at times to 56 bird species, including the endangered black fronted and banded dotterel and black billed gulls.
Residents had done unconsented work to drain the lagoon before, Peet said. This time they will have to go through the normal process to apply for consent.
On February 4 Watson, Rangitīkei District Council chief executive Peter Beggs and assets manager Arno Benadie met with a senior Horizons staff member.
They talked about how consent can be applied for, how extensive the consent process will be and how it will be funded.
It is likely the Department of Conservation and local iwi Ngā Wairiki-Ngāti Apa will have to be consulted, and Horizons may have to investigate.
Watson is happy that progress is being made, because he said council infrastructure was at risk.
"The last thing you want is a sealed road with water under it. That damages a road like nothing else."
A meeting with residents is planned, at which Horizons will explain its position. Consent will be pursued after that.