THE state government has provided $600,000 to Central Coast Council for sand dredging in The Entrance channel - an amount the council will match.
The council has been under intense community pressure to resume dredging the clogged channel.
Dredging stopped in the channel at the end of 2018.
The community says the subsequent build-up of sand in the channel has contributed to the extent of current flooding around the lakes system.
That flooding has impacted communities including San Remo, Budgewoi, Charmhaven, Tuggerawong and Toukley.
The dredging stopped when the Environment Protection Authority issued the council with a notice to stop the discharge of sediment waters at the North Entrance Beach discharge point.
The EPA said at the time it had not ordered the council to cease all sand dredging from The Entrance channel, but it had ordered the council to conduct dredging in accordance with its licence conditions.
Central Coast mayor Lisa Matthews has welcomed the state government funding which she said could applied for in June, 2019, under the Rescuing Our Waterways Program.
She said it was great to see the state government on board and helping to find a solution to problems in the lakes.
"Our community want answers and action and today's funding announcement means we can get on with the dredging program," Cr Matthews said.
"We have always been committed to a dredging program for the channel and have been carrying it out for over 20 years - the missing part recently has been the state government funding.
"The dredging is the short-term solution to the issues facing The Entrance channel. We need now to plan and act for the long term and I look forward to working with the state government and our community to deliver that."
The mayor said she would write to Environment Minister Matt Kean to seek advice on the status of the expert committee, promised in the state government election campaign, to improve water quality and flow in Tuggerah Lakes.