The one-off payment of $2.5 million is to be spent immediately and the results are expected to last two to three years. The area north of the Swansea bridge between Pelican and the drop over will be dredged 60 metres wide and 3.5 metres deep.

To sustain reliable navigation for boats, a maintenance dredge will need to be carried out when the channel returns to a trigger depth of 2.7 metres and each year thereafter.

Swansea MP Garry Edwards said the state government had no plans in place to fund the maintenance work or how it would be carried out.

Mr Edwards said he would like to see Lake Macquarie council contribute to the cost.

Lake Macquarie mayor Jodie Harrison said the lake was on Crown land, which was the state government's responsibility.

Cr Harrison said the channel and Lake Macquarie combined were several times the size of Sydney harbour and the council did not want to burden taxpayers with the cost of its maintenance.

She said the council would consider options presented to it by the state government as long as they were sustainable.

Boat Owners' Association Hunter Region chairman Frank Downing said the two bodies needed to co-operate so Lake Macquarie could remain usable and continue to provide generous returns to the local economy.

"The council puts a fair bit of money into the lake already, but I think they've still got a role in this," Mr Downing said.

He said the last major dredging was conducted in 2006, and six months later silt had already started to build up.

"Scheduled, regular dredging is the key," Mr Downing said.

"Do a big dredge now and nothing after that and it'll be back to the way it was in five years."