The Gowanus Canal is one of the most repugnant places in New York City. The 1.8-mile waterway in central Brooklyn is a toxic cesspool, the result of 150 years of industrial waste dumped in its waters from gas plants, oil refineries, coal yards, paint factories, machine shops, and more. The air stinks of raw sewage. A once-thriving neighborhood that surrounds the canal is decaying and desolate.

Despite everything, an impassioned group of New Yorkers, including artists, urban designers, entertainers, entrepreneurs, and scientists, is trying to make the most out of this environmental catastrophe. It helps that this little strip of land is sandwiched between two of Brooklyn’s most desirable neighborhoods, making the Gowanus a place of possibilities and opportunities. In a city starved for land, private developers, urban planners, and the Bloomberg administration have envisioned hundreds of housing units and waterfront esplanades. (See our photo gallery, "Mapping the Gowanus Canal.")

But first, someone has to clean it up. Last March, the U.S. Environmental Protection Agency designated the waterway a Superfund site, a list that’s reserved for the country’s dirtiest hazardous waste hotspots. The ruling sets into motion a 12-year, $500-million cleanup to be funded by the companies and government agencies that caused the pollution, as determined by the EPA. That includes New York City, National Grid and Consolidated Edison, the U.S. Navy, and several petroleum companies.

This week, the EPA released the results of its study on the canal. Tests of water, sediment, and tissue from fish caught in its waters showed heavy contamination from more than a dozen sources, including heavy metals such as mercury, lead and copper; suspected carcinogens such as PCBs; and thick black coal tar.

"The findings … confirmed that contamination of the urban waterway is widespread and may threaten people’s health, particularly if they eat fish or crabs from the canal or have repeated contact with the canal water or sediment," EPA Regional Administrator Judith Enck said in a statement. "The next step is the review of options for cleaning up the Gowanus, so we can move ahead with a full-scale cleanup of the canal that will result in a revitalized urban waterway."

Despite the clear need for a cleanup, not everyone was happy to see the canal added to the Superfund list last year. Opponents, including Mayor Michael Bloomberg, are concerned that the designation will stigmatize the neighborhood. A rezoning plan is on hold until the Department of City Planning can review the EPA’s feasibility study, which will outline its remedies for cleaning the canal, and determine whether the designation will harm plans for building new homes in the area, an agency spokeswoman said. Last July, the developer Toll Brothers officially pulled its plans for a 460-unit canal-side condominium complex.

It will take three years just to design a plan for cleaning up the canal, a process that is further complicated because of its narrow banks and busy surroundings, the EPA said. Dredging -- if that option is selected -- is expected to begin by 2014 or 2015, and the sediment would most likely be removed via a pipeline or barge, said Walter Mugdan, the EPA’s regional Superfund director.

The water is further polluted by "combined sewer overflows," which allow raw sewage to flow directly into the water after big storms swamp the city’s aging sewer system. The city Department of Environmental Protection is in the midst of a three-year, $140-million project to rehabilitate the canal’s flushing tunnel and pumping station to reduce one-third of these CSOs and increase the flow of clean water. Last summer, officials activated a new system that sends oxygen-rich water throughout the canal while the pump is under construction.

The project is separate from the EPA’s work, but Bloomberg spokesman Marc LaVorgna said the city will work closely with the EPA "because we share the same goal -- a clean canal."

Once the cleanup is complete, companies that polluted the canal are also responsible for maintaining clean water, an agency spokeswoman said. Every five years, EPA scientists will test the canal to ensure that the companies’ remediation plans are working.

"We foresee that there will be fish that can thrive in there, and we foresee that it will be a place where people can go canoeing and kayaking," Mugdan said. "They do that right now. My advice to them is: don’t tip."

In the future, he hopes, that advice won’t be so important.