When baking Masot for the Misva of Masa at the Seder, one must use "Mayim She’lanu" (pronounced with a "Dagesh" in the "Lamed") – meaning, water that has been left overnight. This means that if a person plans to bake Masa for the Misva on Tuesday, then the water that he will knead with the dough should be drawn on Monday, preferably just before sundown, when, the Rabbis teach, water is at its coldest. When drawing the water, one should verbally declare that he draws the water for the purpose of the Misva of Masa ("Hareni Sho’eb Le’shem Misvat Masa"). The water should then be placed in a special utensil where it will remain until the next day.
The Ben Ish Hai (Rav Yosef Haim of Baghdad, 1833-1909) writes (listen to audio recording for precise citation) that one should wash his hands before drawing the water for the Masot. Furthermore, he writes that the water should be drawn specifically by a Jew; one should not ask or hire a gentile to draw the water for the baking of the Masot for Pesah.
The water must be left to sit throughout the entire night, and therefore, as the Ben Ish Hai writes, one should not begin kneading the Masot until after Alot Ha’shahar (daybreak) the next morning. If one begins the process earlier than Alot Ha’shahar, then the water is not considered to have been left to sit throughout the entire night, and the Masot are thus invalid for the Misva. Therefore, one who bakes Masot must ensure to draw the water used for the baking the previous day before sundown, and leave it to sit throughout the night until daybreak.
Summary: The water used for baking Masot for the Misva of Masa at the Seder must be drawn the day before baking, and left to sit throughout the night until daybreak. The water should be drawn specifically by a Jew, who before drawing the water should wash his hands and announce that he draws the water for the purpose of the Misva.