The Tickford ace ran third-last in the Top 10 Shootout, edging Tim Slade with a 2m05.598s.
He then profited from a scruffy lap from Shane van Gisbergen and a mistake from provisional pole-sitter Anton De Pasquale at Skyline to end up on pole.
It’s Waters’ second consecutive pole at Mount Panorama, after he topped the Shootout for the Bathurst 1000 last October.
“I’m absolutely pumped,” he said. “It’s an awesome way to start the year.
“The car rolled out really good in practice and we’ve just been fine tuning it to get it a bit nicer. [The track] was pretty sketchy then, nice and slippery. I’m pumped to be starting off pole here again.”
Slade was the feel-good story of the session, a front-row start a remarkable result for the brand new single-car Blanchard Racing Team.
It also comes after Slade spent the 2020 season on the sidelines after parting ways with Brad Jones Racing after a tough 2019.
“It’s been an awesome weekend up to this point,” said Slade.
“The guys have done a phenomenal amount of work in a short period of time. We didn’t have any employees until the start of November, no workshop, nothing. It’s awesome to be a part of.
“I think that was a pole car, there’s a little bit more in me in a couple of areas. I’m looking forward to the race this afternoon.”
Van Gisbergen ended up third as De Pasquale slipped back to fourth after taking a wild ride through the dirt at Skyline.
“Just pushing the limits,” said DJR’s new recruit of the hair-raising excursion. “Once you go in the dirt there’s not much you can do, you just go for the ride. [The lap] was nothing amazing. We’ll see how we go this afternoon.”
De Pasquale’s teammate Will Davison picked up a couple of spots from qualifying to end up fifth, despite brushing the wall at Turn 2, while Chaz Mostert was left disappointed with set-up changes before the Shootout as he qualified sixth.
Jamie Whincup and rookie Brodie Kostecki will share the fourth row, ahead of Team 18 pair Mark Winterbottom and Scott Pye.