To free Lenya, you have to defeat the boss of the Water Temple, Corallis. Beating Corallis is fairly easy. Use Major Ruin's Rush to knock the boom-root plants into Corallis. Then, when the boss retreats underwater, use Deep Blue to follow him and shoot the 4 orbs on his tentacles with Deep Blue's Blast attack. Repeat until you manage to destroy all 4, should take you two or three times underwater.
You will get this achievement by progressing though the story, you can't miss it.