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The Alexandra dam had lost about 2m of its depth during the past "two or three years", neighbouring residents said.
Council contracts parks officer Ian Mann said a contractor had been engaged to apply a polymer-based product to the western end of the dam, which had been observed as the area of the leaks.
"It works by following the micro-currents caused by leaks, finding the problem areas and plugging cracks."
Another contractor, Leak Detection Services, had previously undertaken investigation work by injecting coloured food dye into the water and monitoring the path of the dye using a drone over the dam, Mr Mann confirmed.
"The depth of water was not adequate to utilise its specialist device.
"Leaks are obvious, but from where has been the unknown."
Mr Mann confirmed the polymer product was safe and would have no adverse effects on plants, fish, pets or livestock.
"While this has been an operational issue, [the council parks team] have tried to keep the community informed as and when there is progress with these investigations."
Mr Mann confirmed the work would begin this week.