It was also decided to declare the lake and neighbouring areas as protected areas.
A decision in this regard was taken at a meeting chaired by Chief Minister Oommen Chandy here last night.
Following the decision, Kovoor Kunjumon, MLA from Kunnathur constituency, under which the lake falls, called off his five-day old fast before the secretariat late in night.
Kunjumon had been demanding that the lake be declared as a protected area, as it is the largest fresh water lake in Kerala.
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Speaking at the meeting, Chandy said steps will be taken for protection of the lake. Co-operation and support of the local bodies and public will be sought, he said.
Sand mining and other illegal activities in this region will be strictly banned. Alternative arrangements will be made to those who are to be rehabilitated, Chandy said.
Acacia trees which consume large quantity of water will be replaced with other trees. Instruction will be given to chop off acacia trees in private land as well. Support of gram panchayat and other social organisations will be sought to plant fresh trees in these areas.
Union Minister Kodikunnil Suresh, state ministers P J Joseph and Shibu Baby John were among those who attended the meeting.