Over the past decades the Arabian Gulf region has witnessed a great economic development and social transformation. The region is facing a water insufficiency problem that is one of the biggest in the world. The level of available renewable water in the region is one fifth of what the rest of the world enjoys on a per capita basis. The population of the region is growing 55% more quickly than the population at the rest of the world. By 2020, water needs is predicted to be around 341 million imperial gallons per day. The threat of water scarcity ensures that investment in developing freshwater supply, along with the recycling and reuse of waste and sea water is an urgent priority across the region moreover strategies for sustainable water use have to be adopted. This means that if strategies for rational water use that entail educational component is not established the water storage is going to run out. This paper reviews the existing situation identifies the gap and proposes an appropriate institutional framework which involves assignment of responsibilities among various levels. Ensures stakeholders participation, accommodates adaptive change and remain self sustainable.