Sustainable water resources management in desert environment has yet to be reached due to the limited hydrological datasets under such extreme arid conditions. In the Eastern Sahara, the tectonic activity associated with the opening of the Red Sea adds more complexity to developing sustainable water management by creating multiple aquifers within subsided half-grabens along the Red Sea extension. To overcome these difficulties, a two-fold approach is adopted including integrated remote sensing and geoelectrical methods using Wadi Al-Ambagi watershed in the Eastern Desert of Egypt as a test site. First, the total discharge is estimated as 15.7 × 106 m3 following the application of a uniform storm of 10 mm effective precipitation, which exceeds the storage capacity of existing mitigation measures (5.5 × 106 m3), and thus additional dams are required. Second, the subsurface geometry of alluvium and sedimentary aquifers, within subsided blocks in the Arabian–Nubian shield (ANS), is delineated using 1D direct current and 2D electrical-resistivity tomography (ERT). Findings indicate that significant thicknesses of more than 80 m of permeable sedimentary units occur within the subsided blocks. Therefore, the scarce water resources can be managed by controlling the flash floods and suggesting proper dam sites at the location of thick alluvium and sedimentary rocks, where aquifers can be recharged representing a sustainable source for freshwater. The proposed approach is transferable and can be applied in similar arid rift-related watersheds in Saudi Arabia and worldwide