The Camden-based practice beat fellow finalists Bennetts Associates and Studio Downie Architects to land the project at the Grade II-listed outdoor pool, built by London County Council architects Rowbotham and Smithson in 1938.
The firm, which is best known for its schemes at Bedales School, Wakehurst Place and Kew Gardens, will now draw up outline proposals for the new café - part of the ongoing 'rejuvenation' programme of the pool which is open all year round.
According to the judging panel of swimmers, council officers, and Hampstead Heath management committee members, Walters and Cohen's experience of 'working with listed buildings in parkland settings' was ultimately the deciding factor.
Eleanor Kennedy, a year-round lido swimmer, said: 'This was a difficult decision to make given the very high calibre of the three shortlisted practices. However, I am delighted that local architects, Walters and Cohen, will be taking forward ideas for the Lido café.
'I am particularly pleased that the architects involved are active Lido users. They have a genuine concern for ensuring that this fabulous local resource is enhanced appropriately and that the process is done in active consultation with swimmers, Heath users and all other interested parties.'
The three-stage contest was organised by the RIBA Competitions Office.