Merocyanine dye assembly in nonpolar solvents is driven by electrostatic dipole‐dipole interactions, which make hierarchical structures of merocyanine less favorable, due to the compensation of its dipole moment in the discrete antiparallel dimer state. Herein, we describe the self‐assembly of a merocyanine dye (MC−OH) into higher aggregates in aqueous medium (with 10% dioxane) by synergistic effect of dipole‐dipole interactions and strong dispersion forces, which remains underexplored for its known molecular stabilization in polar solvents. Our results reveal that in the crystal packing, strong intermolecular hydrogen (H)‐bonding predominates over the dipole‐dipole interactions, which confines the dye into a head‐to‐head parallel π‐stacked assemblage. When intermolecular H‐bonding in water is curtailed, antiparallel dimers by dipolar interactions become predominant. Several of these antiparallel dimers laterally cluster through solvophobically‐induced π‐stacking and form stable nanodiscs, which exhibit efficient hydrophobic dye sequestering properties. At higher concentration, the nanodiscs are transformed into elongated nanotapes. The computational studies support the experimental findings and emphasize the competing nature of multiple noncovalent interactions in guiding the dye assembly under different conditions.