Lõu Bay is considered the south-eastern part of Kaugatoma Bay, which is located by the coast of Saaremaa, west of Sõrve Peninsula. The south-eastern part of Kaugatoma Bay is named Lõu Bay and the north-eastern part is named Ariste Bay. The surface area of the bay is approximately 9.1 km2. The bay is mostly shallow – no more than 5 metres deep. Only at the mouth of the bay does the depth exceed 7 metres. In the past, it was a suitable shelter for sailors in the event of a storm; nowadays, most of the people traversing the bay are local fishermen, and others only find their way there rarely.
The upper beacon of the Lõu leading lights – Anseküla Lighthouse – is in Anseküla village on the northern end of Sõrve Peninsula on Saaremaa. This navigation mark with all-round light aids in navigating around Sõrve Peninsula and, with Lõu Lighthouse 3,128 metres to the west, forms leading lights with a direction of 103.1°–283.1°, which makes it easier for watercraft to enter Lõu Bay on the western coast of Saaremaa between the shallow areas of the Baltic Sea.
The lower lighthouse of the Lõu leading lights is located on the north-eastern shore of Lõu Bay on the western coast of Sõrve Peninsula, in the Salme rural municipality of Saaremaa. With Anseküla Lighthouse, it forms leading lights with a direction of 103.1°–283.1°, which shows the way from the sea between the shallow areas to Lõu Bay and back.