A Large scale dam named as Grand Ethiopian Renaissance Dam (GERD) is currently under construction on the Blue Nile River in Ethiopia. The final report of the International Panel of Experts (IPoE) on the GERD project which was submitted to the governments of Ethiopia, Sudan and Egypt, reported that the Aswan High Dam (AHD) will reach the minimum operational level during 4 consecutive years. Consequently, this project could significantly affect the water supply to Egypt, in case if the first impounding of the GERD occurs during dry years. The present paper assesses the potential impact of the shortage of Egypt water resources that will reduce the releases from AHD due to the construction of the GERD on the Nile water in Egypt. Data was assembled and analyzed. SOBEK model was selected to be applied to the designed scenarios. The water levels so as discharges along the Nile River in Upper Egypt were produced under different water releases. Results were obtained and analyzed. The analyzed results indicated that the maximum allowable reduction in Egypt water share should not be more than 5 - 15%. So, the win–win strategy can defuse tensions between Egypt and Ethiopia over the GERD. Furthermore, Ethiopia has to agree with Egypt and Sudan on the capacity of the GERD reservoir, impounding rules of the GERD reservoir and operating rules. The results of this study most probably assist decision makers to identify possible measures to overcome water shortage problem.