The council said a survey showed the number of water voles living had fallen
Conservationists and a council have joined forces to try and save a dwindling population of water voles.
Ceredigion council, the Environment Agency and the Countryside Council for Wales are working to improve habitats for the mammals in Aberystwyth.
Work is being carried out on a network of ditches and wet areas in the Parc y Llyn area of the town.
The council said a survey last year showed the number of water voles living in the area had fallen.
Volunteers, including offenders on a community payback scheme have been working on the habitat throughout the winter, said the local authority.
They have been removing trees and scrub to improve ditch and riverside habitats.
The council said there was also a bid in for money with a conservation project to build a new pond and ditches. If funding is approved, work could go-ahead in the autumn.
Ceredigion council's biodiversity officer Leanne Bird said: "The project, although primarily for water voles, is designed to improve and create habitat for other wildlife as well.
"In particular we are hoping to encourage biodiversity action plan species such as the common reptiles and amphibians, and improve otter habitat."
Parc y Llyn was originally farmland that was purchased to build housing and retail units.