Groundwater is a primary source of freshwater provisions all around the world. Due to its limited availability, water has become a precious entity nowadays. The future accessibility of groundwater is endangered due to its massive exploitation, particularly in the irrigation sector. Therefore, the current study was conducted to assess the declining groundwater levels in Rechna Doab, Punjab, Pakistan, where the aquifer has been reported to be highly stressed. A groundwater flow model was developed using the MODFLOW code of the USGS, and the steady-state model was calibrated for the year 2006, followed by a transient calibration for the years 2006–2010. Finally, the model was validated for 2011–2013, and a new scenario-based approach was used. Multiple future scenarios were developed to simulate the future response of the aquifer under changed recharge and pumping. The hydrodynamics of the groundwater flow was studied for two decades, i.e., up to 2033. The results under the business-as-usual scenario revealed a net gain in water levels in the upper parts of the study area. In contrast, a lowering of water levels was predicted in the central and lower parts. A maximum drop in the water level was anticipated to be 5.17 m, with a maximum gain of 5 m. For Scenario II, which followed the historical trend of pumping, an overall decline in water levels was observed, with a maximum expected drawdown of 15.68 m. However, the proposed water management Scenario III showed a general decrease in the upper study region, with the highest drop being 10.7 m, whereas an overall recovery of 6.87 m in the lower regions was observed. The simulations also suggested that the unconfined aquifer actively responded to the different scenario-based interventions. It was concluded that the region’s aquifer needs immediate action regarding pumping and recharge patterns to avoid a potential increase in pumping costs and to preserve the sustainability of endangered groundwater resources. Moreover, proper groundwater pumping and its policy legislation for its management should be implemented in order to protect this precious resource.