The toxic cocktail that is the Gowanus Canal took a century to mix. Now plans for the federal government to transform it in 10 years from an environmental blight into a healthy urban waterway are taking shape amid optimism from neighbors and frustration from City Hall.

This week, the United States Environmental Protection Agency announced seven proposals to dredge, cap and dispose of the hazardous waste in Brooklyn’s most infamous body of water. The preferred options for cleaning the 1.8-mile waterway, which has been designated a federal Superfund site, would cost $351 million to $456 million, the E.P.A. said.

What the study determined were its two most feasible plans were met with tempered enthusiasm from community leaders and real estate developers, encouraged that the E.P.A.’s report was delivered on time and provided a frank assessment of the various alternatives.

New York City officials, however, had some reservations; in particular, they dispute the E.P.A.’s claim that the city is responsible for paying to fix the sewage systems that feed into the canal.