Water sector planning and policy making in arid and semi-arid regions are challenging because many drivers and decision criteria require consideration. In this study, a multi-period mixed-integer linear programming model was developed to integrate and economically evaluate water management options for water supply in arid regions. The applicability of the proposed approach was demonstrated through a case study in the Emirate of Abu Dhabi (EAD), United Arab Emirates. The model was programmed in general algebraic modeling system (GAMS) and solved using the Cplex solver. The model determined the optimal economic and environmental costs, capacity expansion of treatment plants and water transmission systems, and other environmental aspects including the carbon footprint and brine discharge. Results show that the capacity contribution of reverse osmosis for desalination is expected to increase from 5.1% in 2021 to 18.1% in 2050. Based on the model's results for the case study, it was concluded that even with moderate consideration of environmental aspects, desalination plants in the EAD need a major technology transformation from thermal desalination to reverse osmosis The proposed model is proved to be effective for integrated water resources management and infrastructure planning in the EAD, and has the potential for effective application in other arid or semi-arid countries.