Council has adopted a proposal to adopt Lake Alexandra as a priority and encourage community involvement in the project.

General manager David McGowan said designating Lake Alexandra as a priority would help council to attract outside funding to restore a valuable public asset.

"The Lake Alexandra reserve is one of the most attractive features of the shire, everyone would say, but we have let it run down," Mr McGowan told council.

Lake Alexandra was built to supply water for the iron works in Mittagong in 1898.

The lake is a refuge for water birds and is a popular recreational area, with picnics, a playground and walking tracks.

Parks and property manager Peter Bowmer said picnic shelters at Lake Alexandra were aged, the playground did not meet Australian standards, the bridge was in poor repair and the edges of the lake were eroding so badly that power poles on the bank were at risk of falling in and had to be disconnected.

Mr McGowan presented a concept plan which includes new shelters, removal of dangerous trees, repairs to the bridge, and erosion control measures.

A cycling/walking track and better fencing are also proposed and there is scope for a kiosk, Mr Bowmer said.