Drought risk assessment for the Murray-Darling Basin (MDB), a drought-prone agricultural region in Australia, was conducted. Region- and agricultural sector-specific indicators of drought hazard, exposure, and vulnerability were selected to calculate the drought risk index. To represent hazardous drought conditions, the Standardized Precipitation Index, Vegetation Health Index, and Root Zone Soil Moisture were used. Population density, land use, and elevation were chosen as drought exposure indicators. Agricultural occupation, soil sand percentage, and Socio-Economic Indexes for Areas (SEIFA) were selected as drought vulnerability indicators. Thematic layers of the drought risk index and its components, hazard, exposure, and vulnerability, were prepared using ArcGIS. A case study for the 2019 drought was investigated and monthly drought risk index maps at the Local Government Area (LGA) level were produced. Overall, the maps demonstrated the presence of extreme drought risk conditions in many LGAs during the austral winter, spring and summer, with the autumn months in lower drought risk categories. The LGAs in the northern and eastern parts of the MDB were in severe-to-extreme drought risk categories during most of the study period. In December, at the peak of drought, almost 90% of the MDB covering the majority of the northern, eastern, and central regions was categorised at severe-to-extreme drought risk levels. Furthermore, the analysis identified a flash drought event in the southern MDB in March-April. The region- and sector-specific drought risk index developed in this study can enhance the user relevance of early warning system information and assist decision-makers in implementing proactive drought adaptation strategies.