Water lilies require occasional transplanting to a larger pot in order to alleviate excessive root crowding or when a pot gets cracked, broken or degrades beyond its useful life. Water lilies prefer some compression of their roots and like many plants flower more consistently when slightly pot-bound. When transplanting, go up just one pot size, to keep the roots contained in the pot but yet feeling snug. Water lilies should be transplanted during their active growth phase from spring to early fall.
Lift lily pot from the pool or pond, setting it on its side to gently remove the root mass. Cut away the pot carefully from the root mass that has engulfed or wound around the pot out through the holes. Keep the roots together as an integral mass as much as possible, to reduce harm or shock to the water lily.
Cut off any damaged or dead leaves down to the crown of the plant. Inspect the tuber for soft, brown rot and cut away any that you find.
Fill the new pot 1/4 full with aquatic potting soil or heavy garden soil and set the lily plant down. Add more soil under the root mass to bring the crown of the lily to its previous planting height in the pot and so that the growth tip is exposed.
Fill the planting medium in around the roots and press down gently to make good contact. Layer on a bit of gravel around the plant base to hold the soil in place. Position the water lily back in its usual growing location, in your water garden.