Alpine Aqualand, at the Events Centre, will close for three months from September 30 while contractors replace the ceiling and fix air flow problems.
The $18million facility, just over a decade old, closed for five weeks last summer after roof tiles were affected by moisture and fell into the water.
The temporary solution was a ceiling of plastic sheeting and tape.
Repair work will cost $2.3million, plus $400,000 in lost income.
Sports and recreation manager Simon Battrick said the council was ``unlikely to take formal recovery proceedings'' against various parties because of the time that had passed since construction.
The council sought legal advice.
The council had instead re-allocated capital money to pay for repairs.
Arrowtown's open-air pool will open early, on September 30, when a new heating system to boost water temperatures to 28degC is initiated.
About 20 staff will be redeployed to Arrowtown, and some will take leave.
