We assess the spatiotemporal characteristics of historical and projected future drought over southern Ethiopia using the Standardized Precipitation Evapotranspiration Index and the K‐means clustering method. Historical assessment is done for the period 1981–2018 while projected drought is analysed over two consecutive future periods, that is, 2021–2060 (near future) and 2061–2100 (far future). Projected drought events are identified under RCP 4.5 and 8.5 climate scenarios based on three RCMs selected after performance evaluation. Modified Mann–Kendall trend test is applied to determine trends and significance at the 5% significance level. The results reveal broadly diverse and heterogeneous spatiotemporal characteristics both over the historical and future periods. Droughts of various frequencies, durations, and magnitudes are observed amongst stations, while trends generally lack spatial coherence. The year 1984 is noted to be the driest year in the historical period while the years 1982, 2009, and 1991 are with the driest March–May (MAM), June–August (JJA), and September–November (SON) seasons, respectively. Compared to the historical period, the frequency, magnitude, and duration of drought events are projected to decrease in the near future and increase in the far future. The frequency of drought events in SON and JJA seasons are projected to increase in the near future and far future, respectively, under both scenarios. More number of station shows a wetting tendency in the historical period while more number of stations exhibit a drying tendency during the projected future periods under the two scenarios. Since complex drought characteristics are observed both in the historical and future periods, rigorous local‐scale drought monitoring and management is recommended.