Lake Hylia:
Travel to Lake Hylia. You'll need the Iron Boots (found in the Graveyard as Child Link) and the Zora Tunic (found in Zora's Domain as Adult Link) to explore underwater. Play Serenade of Water (learned from Sheik) to warp to the Water Temple.
Water Temple:
This dungeon is infamous for its water level manipulation. You'll need to raise and lower the water level using specific switches. Obtain the Longshot. The boss is Morpha. Use the Longshot to pull Morpha's core out of the water, then attack it with your sword. After defeating Morpha, Princess Ruto awakens as the Sage of Water, granting you the Water Medallion.