The Middle East will face tremendous water scarcity by 2050, which can only be mitigated by large-scale reverse osmosis seawater desalination. However, the coastal land in the region is rare and costly, so outsourcing the desalination facility to artificial islands could become a realistic scenario. This study investigated the ecological and economic challenges and possible advantages of that water supply option by analysing conceptual alternatives for offshore membrane-based desalination plants of up to 600 MCM/y capacity. Key environmental impacts and mitigation strategies were identified, and a detailed economic analysis was conducted to compare the new approach to state-of-the-art. The economic analysis included calculating the cost of water production (WPC) and discussing the differences between offshore alternatives and a conventional onshore desalination plant. In addition, the study investigated the impact of a changing energy mix and potential carbon tax levels on the WPC until 2050. The results indicate that offshore desalination plants have ecological advantages compared to onshore desalination plants. Furthermore, the construction cost for the artificial islands has a much lower effect on the WPC than energy cost. In contrast, the impact of potential carbon tax levels on the WPC is significant. The specific construction cost ranges between 287 $/m2 and 1507 $/m2 depending on the artificial island type and distance to the shoreline, resulting in a WPC between 0.51 $/m3 and 0.59 $/m3. This work is the first to discuss the environmental and economic effects of locating large-scale seawater desalination plants on artificial islands.