Locate your water garden where it will receive a minimum of six hours of sun, and preferably even more than that. Water garden plants and fish thrive best in at least a half a day's worth of sunlight, according to the University of Illinois Extension.
Clear the location of rocks and plants, and flatten the ground. Make it as level as possible so that the surface of the water in your container will also be level.
Dig a hole for your chosen container. It should be deep enough so that the surface of the water will be a bit below ground level when the liner or container is placed into the hole. This will prevent flooding during rainy periods and allow you to hide the edges of the container with rocks.
Cut a piece of carpet underlayment to fit inside the hole, and press it into the space. This will cushion and protect the water garden container.
Fit the water garden container into the hole on top of the carpet underlayment. Lay rocks around the edges of the container to secure it and to hide any carpet underlayment that is protruding from underneath. Add a few rocks to the bottom of the form, especially if it's just a liner and not a solid form.
Add a thick layer of potting soil mixed with equal amounts of peat moss to the water garden. The exact amount will vary depending on the size of your container, but it should be deep enough so that you can plant some aquatic plants. Slowly add water so that the soil mixture becomes saturated but is not disturbed.
Plant aquatic plants in the soil, and set potted aquatic plants on the rocks you placed at the bottom of the container. Then, fill the container to a few inches below the surface, and add a submersible water pump if you wish.