A nested-grid depth-averaged circulation model was developed and applied to three nearshore areas in Hamilton Harbour: the western basin, LaSalle Park waterfront and the northeastern shoreline. The grid sizes used were 100 m for the whole harbour, and 25 m for the three nearshore areas. General features of current circulation and horizontal mixing times under various wind directions and speeds were obtained for the whole harbour using the coarse-grid model. The fine-grid model (water elevations and current information on the open boundaries were obtained from the whole harbour model) then provided current patterns which were used to drive the pollutant transport model. Simulation results reveal that the current in the fine-grid model is close to the current from the coarse-grid model, while more detailed current structures are explored. The water elevations from the fine-grid model agree well with the elevations from the coarse-grid one. The impact of artificial islands was examined by studying changes in current patterns, pollutant peaks, exposure and flushing time in different locations of concern. The design proposed provides: (i) minimum change in the existing current patterns; (ii) avoidance of pollutant hot spots; and (iii) minimum changes in the flushing time of pollutants.