People could be prescribed an afternoon of paddleboarding or some canal-side gardening to improve their health.
Nearly £50,000 has been given to The Thriving Communities project so patients can make use of the Nottingham and Beeston canal.
Doctors and health workers in Nottingham will be able to refer people to canal-based community projects in what is called "social prescribing".
One GP said it can "improve the quality of somebody's life".
The Canal and River Trust said groups in Nottingham would receive the money to offer people activities to "boost their physical and mental health".
These include canoeing and paddleboard sessions, gardening along the canal, volunteering opportunities and wellbeing walks.
Photography courses, art lessons, cookery classes, and communal meals will also be allowed once coronavirus restrictions ease.
The Canal and River Trust's partnerships and external relationship manager, Linny Beaumont, said: "Research tells us that spending time by water can help us to feel happier and healthier and we firmly believe that the canal, which runs for five miles through some of our most populated areas, is uniquely placed to help address some of the big health challenges faced in the city."
Social prescribing is where people are referred to community groups or statutory services by GPs or health professionals who hope it can aid their mental or general wellbeing.
Nottingham-based GP Dr Nicole Atkinson said: "There have been a number of studies done that identifies it really does improve the quality of somebody's life.
"It has significant benefits on their mental health and also to their physical wellbeing so much so that this approach has been rolled out across the country."
The funding has been made available by the National Academy of Social Prescribing, Arts Council England, Natural England and Historic England.