The deterioration of the Posidonia species is attracting the most attention.

"Posidonia is one of the more sensitive species of seagrass and not widespread, so it's quite a concern," Lake Macquarie City Council lake spokesman Symon Walpole said.

"We've been using seagrass for a number of years as an indicator of the health of the lake."

Seagrass provides nursery grounds and food for fish and other marine creatures and stabilises the lake-bed.

Mr Walpole said the council was investigating the cause of the decline.

A council report said the latest research showed seagrass coverage in seven bays of the lake measured 1265 hectares, a decrease of 208 hectares from 2007.

But seagrass had increased by 240 hectares since 2000.

Mr Walpole is leading a council team to improve the lake, taking over after Jeff Jansson retired.

"The lake itself is significant to not only the city, but the whole region," Mr Walpole said.

"In a lot of respects, the lake provides a bit of identity to people and a lot of people in the city connect with it."

Mr Walpole will try to keep that connection strong this year, with a $3 million budget at his disposal.

Much work has been done over the past decade improving areas around the lake.

"The priority this year is getting up into the catchments and addressing the sources of pollution," he said.

Research will be done to understand how rising sea levels will effect the lake and its exchange of water with the ocean.

Damon Cronshaw