NEWBURY — The town has received a $62,000 federal grant to improve the habitat of the Parker River, likely by removing the Larkin Mill Dam.

Town Administrator Chuck Kostro said the town should be ready by next week to put out a request for proposals from engineering firms that would conduct the study funded by the grant.

The funds were awarded by the National Oceanic and Atmospheric Administration (NOAA) and the Gulf of Maine Council for the Marine Environment for a joint project by the town and the Massachusetts Riverways Program to restore aquatic habitat in the Parker River.

The Parker River, which is crossed by the Larkin Mill Dam just off Larkin Road in Byfield, supports a diversity of fish and wildlife, including a remnant population of migratory alewife, according to a statement from the state Office of Energy and Environmental Affairs. The dam and an antiquated concrete fish ladder have blocked full access to upstream fish-spawning habitat and wildlife crossings, the statement said. The funding will be used to assess fish passage options, including the possibility of removing the town-owned dam.

"Our initial engineering evaluation suggests that dam removal is not only feasible, but would likely cost much less than a replacement," said Tim Purinton, River Restoration planner for the Riverways Program.

He said the trend has been for feasibility studies to recommend dam removal.

"The idea is to get the engineers out there and see the fish run. That happens in April and May," Purinton said.

According to the Parker River Clean Water Association and historical fish count data, 20,000 to 30,000 alewife fish returned to the Parker River to spawn during the 1960s. Recent counts indicate that returning fish number fewer than 1,000 now.

"Alewife, American eels, blueback herring and rainbow smelt were once abundant in the Parker River," said Eric Hutchins, fisheries biologist for NOAA. "The Parker River has five major dams which, coupled with the slow degradation of the fish ladders on these dams, have had cumulative impacts on the amount of spawning fish."

Hutchins said the Parker River has the ability to support more fish.

"The dam and concrete fish ladder are in rough shape, and given our current economic state, we need a cost-effective way to remedy this problem," Selectman Joe Story said in the statement. "This project will create jobs while removing a barrier to fish passage and improving safety on the river."

The dam was transferred to the town by Benjamin Pearson, the former owner of the Byfield Snuff Company, more than 15 years ago. A preliminary report that examined dam removal was funded during fiscal year 2007 by the Department of Fish and Game's Riverways Program at a cost of $2,500.

Newbury's bid deadline for the engineering work will likely be March 24, Kostro said. Site visits of the dam are scheduled for March 3.