The draft Lake Illawarra Coastal Management Program has been developed to provide direction and actions to maintain the needs and challenges of the waterway.

After years of community consultation and scientific studies, the Lake Illawarra Estuary Management Committee has identified water pollution, catchment development and changes in the lake due to the entrance channel opening as the highest threats.

The committee, which was set up after the Lake Illawarra Authority was disbanded in 2014, has now developed nine management strategies and 37 actions that will ensure the lake remains healthy and a functioning community asset.

Read more: The highs and (stinky, dry) lows of Lake Illawarra in photos

However, that management comes at a huge cost for both councils.

Wollongong Lord Mayor Gordon Bradbery said both councils had identified the lake as being a "very important" and beautiful asset in the region.

"We needed to identify the lake's needs, work out ways to prioritise the actions which include managing the erosion, run off and siltation in the lake, and work out how we are going to fund those actions," he said.

"Yes, the councils will do their bit but the major costs will fall back on the state's shoulders."

Shellharbour Mayor Marianne Saliba said her top priority was finding funding to carry out the management of the lake.

"I'm concerned this is a process of cost-shifting from the state government to local governments," she said.

The plan is expected to be adopted by both councils next week and the document will go onto public exhibition for 43 days.

The state government will then need to sign off and certify the plan.

Cr Saliba asked the community to identify where the management of the lake fit within the council's priorities because that would then dictate the budget it allocated.

Cr Bradbery said it was important for residents to submit feedback to ensure the committee "got their views" right during community consultation.

The plan's strategies include improving water quality, managing the channel entrance and erosion, rehabilitating vegetation, protecting fauna and improving the recreational amenity.