Hawassa is a rapidly developing city in the Lake Hawassa watershed of Ethiopia that is a continuous change in the face of an urban environment. The urban development has been increasing the challenge to maintain urban services and surrounding environmental quality. These exert a new challenge to the growing gap between urban water demand and supply balance. Correlating urban growth and water demand to a rapidly growing population remains imperative to adaptive urban planning and decision-making. This study quantified urban development with demographic change and urban expansion dynamics. The population statistics and satellite imageries of historical years 1991-2021 and projections to the year 2051 were analysed using the exponential increase model and geospatial techniques. Multiple empirical modelling approaches were employed to link urban water demand with the explanatory variable. The study findings revealed the projected urban population reach more than one million and 79.2% of urbanization by 2051. With the current trend of 8.9 % built-up growth rate, urban area will cover 73.6 km2 (45.9%) for the predicted period. The demographic variables and the sprawl of urban expansion jointly influence the water demand with statistically significant (f=0.000, at α=0.05) association. An increase in urban water use efficiency also reduces the water demand by increasing the availability of water supplies. Thus, the proposed model can be applied to reset the emerging relationship between the explanatory variables and water demand management. A detailed consideration of the spatially explicit effect on access to and optimization of the urban water supply system is vital to a local-specific solution. Integrating urban land planning with water demand management, therefore, has the potential to minimize the need to construct additional water supply infrastructure and cheer a sustainable urban environment.