The Tickford driver, who was fastest in yesterday’s opening practice session, left his run late in this morning’s all-driver hit-out.
Having taken over from co-driver James Moffat, who was in the car for the early running, Waters charged to the top with a 2m04.738s in his Monster Mustang.
That left him a quarter of a second ahead of Shane van Gisbergen, who had become the first driver into the fours for the weekend with a 2m04.982s in the final third of the session.
Chaz Mostert kept his strong run going with the third fastest time, the Walkinshaw ace also dipping into the fours with a 2m04.994s.
Jamie Whincup was fourth quickest in the #88 Holden while Anton De Pasquale, one of the pre-race favourites, showed his hand for the first time this weekend with a 2m05.041s.
James Courtney was sixth fastest ahead of early pacesetter Brodie Kostecki. The Erebus team basically ran out of sync with the #99, Kostecki in the car early in the session before handing over to co-driver David Russell towards the end.
Jack Le Brocq capped off a solid morning for Tickford with the eighth fastest time ahead of Will Davison and Tim Slade.
The #96 Brad Jones Racing entry, meanwhile, was back on track following its overnight rebuild after Chris Pither’s Practice 2 crash.
Pither and Macauley Jones ended the session 26th and last.
There is a fourth hour-long practice session a 1:30pm local time today before qualifying takes place at 4:35pm.