Although blockchain technology was first applied for peer-to-peer financial transactions, it has been used for the digitalization of physical asset management and data management processes in many areas in the industry and academia, including the water domain. Its potential as an immutable data storage system and smart contract integration has provided a plethora of use cases and utility in the domain of hydrology and water resources. In this article, a comprehensive systematic literature review on blockchain applications, opportunities and challenges for the water sector is conducted. The study provides the examination of academic publications, technical reports, whitepapers, hackathon projects, non-academic content and evaluation of the published year, focused hydrology sub-domain, utilized blockchain networks, tools, and development level of application of reviewed content. The current status of blockchain technology in the hydrology literature, potential application areas in the water sector, research gaps, and challenges are discussed from different perspectives, and future study areas are recommended.