This is a traditional German folktale about a mysterious creature called the Nixie who lives in a mill-pond. The Nixie is said to be a beautiful woman with long, flowing hair and a fish-like tail. She is said to lure people to the mill-pond
From Wikipedia
"The Nixie of the Mill-Pond" is a German fairy tale that tells the story of a man captured by a nix and his wife's efforts to save him. The Brothers Grimm collected the tale in their Grimm's Fairy Tales (1857) as tale number 181. A note in the volume indicated that it was current in Upper Lusatia when the story was collected. Andrew Lang included a version in The Yellow Fairy Book, citing his source Hermann Kletke and titling it The Nixy.