How do you create water?

How exactly do you create water in Hammer or the S&Box editor? I haven't found a clear way in the editor or component to add this functionality.

If it works like source 1 then you just add a water material to the top of a brush but maybe its different now

Well, it seems you put a tag called "water" on a Game Object and the player controller acts accordingly, I just haven't found a realistic water shader yet.