A £320,000 grant has been given to a project clearing a stretch of canal clogged with dead and fallen trees.
The Canal & River Trust has begun restoring just over a mile of the Montgomery Canal near Welshpool, Powys.
At the moment, it is "unnavigable" and the project aims to clear the water so boats can use the canal.
Mark Weatherall of the Canal & River Trust said this also meant "plants can flourish and create healthy habitats for fish, insects and small mammals".
The cash from People's Postcode Lottery will be spent on removing vegetation from the water and repairing and restoring canal banks.
Mr Weatherall, the project manager, said this would create clearer, better oxygenated water in which plants and animals could flourish.
He added: "It is vitally important to keep the Montgomery Canal in good health. If the water channel becomes choked with weeds, the water quality quickly deteriorates and becomes stagnant."
The endangered water vole and dragonflies are among the animals said to benefit from the project.
The work between Berriew and Arddleen is set to be finished by the end of April and it is hoped the entire 35-mile (56km) Montgomery Canal can be fully restored over the next 10 years.