The operating system of a reservoir is a significant contributor to its success in water resources management. For a multi-purpose reservoir, an ideal operating system determines output characteristics that take account of all objectives. In this study, a new model to optimize Darbandikhan reservoir system operation in Iraq is proposed, based on a fuzzy logic controller. The aim of the new system is to maximize hydropower production while satisfying all downstream water demands. The proposal was tested on flow and other data in 324 monthly time steps, from January 1992 to December 2018, using a simulation model based on the Simulink technique of MATLAB software. Trial and error showed that membership functions of the Gaussian shape were most appropriate. For comparison purposes, Discrete Differential Dynamic Programming (DDDP), Nonlinear Programming (NLP) and Linear Programming (LP) optimization models were developed and applied to operate the reservoir. The results for turbine operation show that, relative to actual power produced, average monthly hydropower generation is increased by 32.2% (fuzzy logic), 51.4% (DDDP), 29.3% (NLP), 27.4% (LP). Although the dynamic programming method generated more hydropower, the fuzzy logic controller avoided complex optimization procedures, making it more flexible and more acceptable to operators. Moreover, the fuzzy approach provides an opportunity for reservoir operators to develop and apply more convenient operating rules, which in itself is a valuable alternative to conventional optimization techniques.