Lake Managua. Lake Managua (Spanish: Lago de Managua, [ma??na??wa]), also known as Lake Xolotl??n (Lago Xolotl??n), is a lake in Nicaragua. At 1,042 km??, it is approximately 65 kilometres (40 mi) long and 25 kilometres (16 mi) wide. Similarly to the name of Lake Nicaragua, its other name comes from the Nahuatl language, possibly from the Spanish Tlaxcalan and Mexica allies or the Nawat Nicarao that were already there in today Rivas Department. The city of Managua, the capital of Nicaragua, lies on its southwestern shore.