The Collaborative International Dictionary of English v.0.48:

Water line \Wa"ter line`\
   1. (Shipbuilding) Any one of certain lines of a vessel,
      model, or plan, parallel with the surface of the water at
      various heights from the keel.
      [1913 Webster]

   Note: In a half-breadth plan, the water lines are outward
         curves showing the horizontal form of the ship at their
         several heights; in a sheer plan, they are projected as
         straight horizontal lines.
         [1913 Webster]

   2. (Naut.) Any one of several lines marked upon the outside
      of a vessel, corresponding with the surface of the water
      when she is afloat on an even keel. The lowest line
      indicates the vessel's proper submergence when not loaded,
      and is called the light water line; the highest, called
      the load water line, indicates her proper submergence
      when loaded.
      [1913 Webster]

   Water-line model (Shipbuilding), a model of a vessel formed
      of boards which are shaped according to the water lines as
      shown in the plans and laid upon each other to form a
      solid model.
      [1913 Webster]