Creating your Island
The island that you create really depends on the type of pond you plan on building. First you have to decide whether you dig out the pond, seal it then build the island or dig out the pond to leave an island. If you decide that on the last scenario then you will have to line it with concrete, making the pond watertight. You can use a liner, but it ends up being a bulky chore and its shape may be a little awkward to construct. The main reason to construct an island this way is to form around existing shrubs or trees already located in the constructed area.
If an island is to be created after the pond is excavated and lined, there is more than one method. The easiest and most natural is to build the island while the pond is empty, using burlap bags filled with sand. All but the last 12" should be subsoil. The top 12" should be topsoil. This will keep unwanted nutrients from entering the water when it's completed and filled.
If you will construct a concrete pond, then concrete block can be used to build within 4" of the water level. Marine plywood boards fastened with brass screws should be used to around the top of the block work. They should just break the surface of the water and act like a timber edging. Now you can fill the center with soil to create the island above the water level.
You don’t have to completely cover the island with vegetation. You can have a rocky outcropping with areas of soil were plants and small trees can be planted. The rocks can come up the sides, be concerted in and come out of the water slightly for a natural look. Be sure not to use sandstone or limestone and chemicals from them will leech into the pond causing all kinds of problems later. They will also flake and crumble after they freeze in the winter months.
Floating Islands
An inexpensive island type is a floating island. You can use an old wooden pallet or a construction similar to a section of decking. Depending on the construction, you may need to some extra buoyancy. Using old plastic soft drink bottles work well and can be hidden with the island raft you are building. The island should be secured and not left to floating around. You can accomplish this using nylon rope secured to a sealed concrete block.
You can also construct your island using soil or sandbags. Fill the bags and start making a four side’s wall. When you reach the half way point, fill the center with hardcore or rocks. Continue building your island with the bags up to the water level. Once you have reached the water level, fill the remainder of the structure with soil. You can now plant bog or aquatic plants in the soil giving your island a natural look. Note that when the soil is wet it may compact. You may have to fill it again until the soil is compacted.
This should give you the basics of preparing and constructing your own Island oasis in your pond.