In the field of hydrology, stage–discharge relationships are commonly used to estimate the discharge at the basin outlet or by experimental plots. Many experimental efforts have been made in order to derive stage–discharge relationships, according to the Buckingham theorem and dimensional analysis, for a multiplicity of gauge geometry. However, these relationships require experimental and physical meaningless numerical coefficients, thus they need extended calibration. The latter issue merits attention, since the empirical coefficients can be applied when the experimental conditions are strictly reproduced in the field. The aim of this paper is to derive a theoretically based stage–discharge relationship of a non-linear water reservoir that requires limited calibration, by using the continuity equation and the principle of conservation of energy. An analysis was performed using a rectangular water tank with a hole at the bottom. However, the suggested approach can be similarly used for tank geometries that differ from the example used in this study. Since the proposed approach is purely hydraulic, only limited calibration of the physical meaningful discharge coefficient characteristic of the hole is needed. A tank design procedure is suggested, and different theoretical and experimental applications of the proposed methodology are performed and discussed. For the considered cases, the mass water balance was also checked.