As a result of natural and anthropogenic eutrophication, shallow lakes ultimately become wetlands. Several aquatic ecosystem values diminish, but some biotic communities may benefit. Lake Lahepera is a very shallow lake filled with sediments and overgrown with macrophytes. It is a former bay and an important spawning ground for fishes of Lake Peipsi, the fourth largest lake in Europe. The main question is, how to reconcile the goals of nature conservation and circular economy – restore and maintain good functioning of the lake ecosystem, preserve habitats for wetland communities, make economic use of sapropel, and renew spawning conditions for fish. The lake has been investigated since the 1950s. Resulting from strong human pressure, especially in the 1970s and 1980s, the accumulated organic sediments and macrophyte overgrowth have diminished the habitat diversity of the lake. Irregular flushing of the lake with Lake Peipsi waters can wash away large amounts of phosphorus. According to the investigations in 2014-15, phosphorus in- and outflow are in balance, but the internal loading is high. A set of possible restoration options with sediment and macrophyte removal methods is proposed and their outcome assessed using the ecosystem service concept. A comparison of possible future scenarios, based ecosystem service values shows that with a balanced combination of different habitat restoration methods it is possible to achieve stable ecological status of the lake. Species diversity, especially that of floating leaved macrophytes, will increase in the lake. At the same time, wetland habitats will retain their values.