Kerry County Council has sought funding for a survey of the canal in Tralee in the hopes of developing a blueway.
Blueways are recreational trails, based on or along canals, rivers and lakes.
If this application under the Urban Regeneration Development Fund is successful, the council plans to undertake an extensive engineering survey of the 2.5km length of the canal.
This would allow them prepare designs for the development of a blueway that can achieve blue flag status and provide a link to Tralee Bay.
The council was responding to a question from Sinn Féin Cllr Deirdre Ferris, who said a blueway has the potential to benefit not just local water adventure businesses but the whole local economy.