Lets read the whole conversation to get the teaching Jesus gave Nicodemus.

John 3:1-13: “There was a man of the Pharisees named Nicodemus, a ruler of the Jews. This man came to Jesus by night and said to Him, "Rabbi, we know that You are a teacher come from God; for no one can do these signs that You do unless God is with him." Jesus answered and said to him, "Most assuredly, I say to you, unless one is born again, he cannot see the kingdom of God." Nicodemus said to Him, "How can a man be born when he is old? Can he enter a second time into his mother's womb and be born?" Jesus answered, "Most assuredly, I say to you, unless one is born of water and the Spirit, he cannot enter the kingdom of God. "That which is born of the flesh is flesh, and that which is born of the Spirit is spirit. "Do not marvel that I said to you, 'You must be born again.' "The wind blows where it wishes, and you hear the sound of it, but cannot tell where it comes from and where it goes. So is everyone who is born of the Spirit." Nicodemus answered and said to Him, "How can these things be?" Jesus answered and said to him, "Are you the teacher of Israel, and do not know these things? "Most assuredly, I say to you, We speak what We know and testify what We have seen, and you do not receive Our witness. "If I have told you earthly things and you do not believe, how will you believe if I tell you heavenly things? "No one has ascended to heaven but He who came down from heaven, that is, the Son of Man who is in heaven.

Jesus is having a conversation with Nicodemus, who was a Pharisee. Jesus spoke to Nicodemus in accordance to the Pharisee’s teaching- to be born of water meant to be born physically. This is proved by Nicodemus remark who thought to be born again meant a physical birth “How can a man be born when he is old? Can he enter a second time into his mother's womb and be born? In verse 5, Jesus proceeds to say, “Unless one is born of water and the Spirit, you cannot enter the kingdom of God.” Nicodemus, who was a Pharisee, believed like the other Jews that because he was born a Jew and kept God’s ordinances that he should automatically enter into the kingdom of God. However, Jesus explains this is not enough. In verse 6, Jesus Himself interprets the water as flesh (a physical birth) "That which is born of the flesh is flesh, and that which is born of the Spirit is spirit." Jesus says of being born of water is to be born of the flesh. Jesus explains the difference, telling Nicodemus you have already had a physical birth, you are in need of a another birth “Do not marvel that I said to you, 'You must be born again.' Literally from the Spirit above to enter the kingdom. You must be born again “that which is born of the Spirit is spirit." The new birth from above is a second birth which gives us eternal life

V.5 The new birth is invisible, he likens it to the wind. It is not from the water beneath (the flesh) but of the Spirit (literally, in the Greek, from above). He is contrasting the natural (flesh) to the spiritual (Spirit).

The term born of water is used only once by John but the term born of  God (the Spirit) he uses numerous times.

I Jn 4:7: “Beloved, let us love one another, for love is of God; and everyone who loves is born of God and knows God” This is the love of God shed in a believers heart by believing the gospel.

I Jn 5:1: “Whoever believes that Jesus is the Christ is born of God, and everyone who loves Him who begot also loves him who is begotten of Him.” This of course has to do with the gospel.

I Jn 5:4: “ For whatever is born of God overcomes the world. And this is the victory that has overcome the world-- our faith” The new nature of the spirit of God has our affections change toward God and not toward the fallen world.

I Jn 3:9 Whoever has been born of God does not sin, for His seed remains in him; and he cannot sin, because he has been born of God. ”

I Jn 5:18: “We know that whoever is born of God does not sin; but he who has been born of God keeps himself, and the wicked one does not touch him.” There is life change where one lives more in righteousness than they do in the old way of life in sin. John explains this in I Jn 2:29: “If you know that He is righteous, you know that everyone who practices righteousness is born of Him” And Paul teaches this through the book of Romans especially chapter 6-7

Romans 7:6 “But now we have been delivered from the law, having died to what we were held by, so that we should serve in the newness of the Spirit and not in the oldness of the letter.”

The Bible teaches that a man is “born of God” (Greek- EK - out of). This description occurs four times in John’s epistle alone, 1 Jn. 3:9, 4:7, 5:1,4. In all the instances where the source of the new birth is mentioned, the language is EK Him, EK God, or EK Spirit. John 1:12-13, we receive Christ by believing in His name, “not born by the will of man . . . but of God.” Nowhere in the Bible does it say that God uses creation (born of water) as part of conveying the new birth. The Greek preposition (“out of”) is never used elsewhere in connection anything else but its source which is God Himself.

In John 3:3, the term “born-again” literally means “to be born from above,” is what happens by Jesus sending His Spirit to those who respond to the gospel. The very essence of regeneration is by the indwelling of the Holy Spirit. It is an unseen work that one receives when they believe, they are then sealed with the Holy Spirit (Eph. 1:13).

The context of Jn. 3:5 must be related to Jesus’ previous statement in Jn. 3:3 :“Unless one is born again, he cannot see the kingdom of God.” There is only one new birth mentioned in this verse and it is from the Spirit as other Scriptures uphold. John 3:6-7: "That which is born of the flesh is flesh, and that which is born of the Spirit is spirit. "Do not marvel that I said to you, 'You must be born again. .”’