The site is an alternative to the club's preferred site, which is tucked away among poplar trees near Tapley Paddock, at the west end of Roys Bay, with access from the Millennium Track.
The alternative site would be in full public view, next to the public toilets on the lakeshore and opposite the large radiata hedge that separates the Wanaka showgrounds from Mt Aspiring Rd.
The instruction by the Wanaka Community Board on Tuesday was not a surprise but would delay the club's plans to apply for resource consent and raise funds for the building.
The site issue was foreshadowed by former mayor Clive Geddes in October last year, at his last board meeting before the local authority elections.
At that time he said the community should expect water-based sports clubs to use lakeside reserves for facilities and sports clubs should not shy away from applying to use it.
Mr Geddes suggested the McDougall St site and a site near the Stoney Creek bridge.
However, at the time, the board asked the club to further explore its Tapley Paddock proposal, before deciding whether to approve a lease over that land.
Council property manager Jo Conroy said the Tapley Paddock site, now marked by profile poles, had been shifted slightly from the position indicated in October because private landowners were concerned about views and amenities.
The Tapley Paddock site is no longer in front of houses but would require the removal of many poplar trees as well as two trees deemed by the council to be "significant".
Crs Leigh Overton and Lyal Cocks were concerned about the implications and costs of removing the trees.
Cr Overton said the McDougall St site did not have any residential neighbours, would not impact on views, would not require tree work and had good access.
Club spokesman Dave Varney said the club had thought the highly visible McDougall St site would be a "no-go zone in the community".
The clubhouse footprint of 20m by 22m would not change if it was built at McDougall St, but other profile changes could probably be made to keep the public happy, he said.
Mrs Conroy said the Lake Wanaka lakeshore management plan would permit a clubhouse at the end of McDougall St, just so long as it was "aesthetically pleasing".
Cr Cocks confirmed, when asked by board member Bryan Lloyd, that combining with the Wanaka Yacht and Power Boat Club on Lakeside Rd had been considered and discounted.
"We have a trail of documentation on that. We don't want to revisit that," Cr Cocks said.
Once the alternative site has been submitted and assessed, the board will decide which site it supports.
It will then call for public submissions and appoint a hearings panel to make a recommendation to the council.
