Noel Hunt put The Blues in front on 31 minutes.
He slotted in from an acute angle after getting on the end of a Rory Feely long ball.
It took just one minute for the visiting champions to respond, with Graham Cummins and Gary Buckley combining for the equaliser.
Cork City went in front on 53 minutes through Graham Cummins and despite the home side finishing with three up front, they were unable to level the tie.
It finished Waterford FC – 1 Cork City – 2.
The Blues remain one point above Shamrock Rovers in third place, however the Hoops have a game in hand following the postponement of their game against Dundalk.