Abstract: A canal-restoration system and method has a processor tank (1) that includes a screen (5) vertically above a soil accumulator (6) and vertically below a water collector (4) near a top portion of the processor tank. Waterway sludge pumped from canals is conveyed downward in a sludge inlet (7) onto a disperser (14) and into the soil accumulator. Below the sludge inlet, soil (15) in the waterway sludge settles downwardly for dump or conveyance removal. Also, below the sludge inlet, settled water (16) circulates upwardly through the screen to the water collector at a top portion of the processor tank for conveyance back to the canals as screened-clear water (17). The screen preferably has upwardly progressive fineness of a plurality of three or more screens. A downward settling action keeps the screen unclogged and easily cleaned.