The degradation and loss of ecologically important wetlands has been a topical issue in the Great Lakes region, where 60–80% of the coastal wetlands have been lost since the 1800s. The present modeling study aims to guide the restoration efforts in Cootes Paradise marsh, one of the most degraded shallow wetlands in Southern Ontario. We use a process‐based eutrophication model designed to reproduce the biotic competition among multiple phytoplankton and macrophyte functional groups. Our primary focus is to offer guidelines for wetland restoration by characterizing the ecophysiological processes of the autotrophic assemblage, such as the nutrient uptake from the water column and/or the sediment pore waters, the relative ability to harvest light and fuel photosynthesis, and temperature control of the algal/macrophyte growth and basal metabolism. We predict that the additional reduction of external phosphorus loading in Cootes Paradise could induce an abrupt, non‐linear shift from the current turbid phytoplankton‐dominated state to a desirable clear macrophyte‐dominated state. The emergence of this critical (or tipping) point, where the shift to another ecological state may occur, can be accelerated by the presence of a thriving macrophyte community with an enhanced ability to sequester phosphorus. However, it may also be delayed by the presence of a suite of biogeochemical mechanisms (often referred to as “feedback loops”), such as the remobilization of legacy P due to sediment diagenetic processes, wind resuspension, bioturbation, hydraulic loading from local tributaries, water‐level fluctuations, and the leachable P pool of dead plant material that can be returned into the water column through senescence. Our study identifies the restoration actions required to minimize the likelihood of prolonged hysteresis and to facilitate a shift to a desirable ecological state in the foreseeable future. The areal expansion of aquatic vegetation will not only lead to the establishment of a thriving meadow and emergent vegetation community, but may also pave the way for submerged macrophytes through a suite of synergistic mechanisms. Additional point‐source loading reductions will facilitate the transition to an alternative stable clear macrophyte‐dominated state, but could also consolidate the future resilience of the marsh.