Fill a pond basket with a dense, moist potting soil. Use a 15-inch diameter basket for hardy lilies and a 20-inch diameter basket for tropical varieties. Pond baskets have holes around the sides that allow the pond water to penetrate into the soil.
Transplant hardy lily rhizomes into the pot by laying them in the soil with the growing eye at the center of the pot and the other end of the root near the side of the pot. Arrange the rhizome so the eye-end sits just beneath the soil surface and the other end of the root sits 1 to 2 inches beneath the soil surface. Lay tropical lily rhizomes flat in the center of the pot, setting the rhizome just beneath the soil surface.
Cover the soil surface with a 1/2-inch layer of pea gravel. Gravel protects the roots from feeding fish and prevents the soil from floating out of the pot.
Set the potted lily into the pond or water feature. Place hardy lily pots so the top of the pot sits 12 to 18 inches beneath the water surface. Place tropical lily pots so the top of the pot sits 8 to 12 inches beneath the water surface.