The recent climate change is due to human activities such as burning of fossil fuels, deforestation, industrialization, and agricultural activities and it is manifested by increasing global temperature, and anomalous rainfall. This study predicts the water balance changes of the Gidabo sub-basin, Rift Valley Basin, Ethiopia, under future probable climatic changes. A climate ensemble of Regional Climate Model outputs of simulation driven by the five global climate models under the Representative Concentration Pathways (RCPs) 4.5 and 8.5 have been used for climate assessment. The sub-basin's water balance components were modeled using the Soil and Water Assessment Tool (SWAT). The hydrological modeling with climate change projection under RCP 4.5 shows a decline in mean annual surface runoff (Q), water yield (WY), and actual evapotranspiration (AET) during the mid-century (2027-2056) by 12.88, 14.41, and 0.32%, respectively, and during the late century (2061-2090) by 18.15, 22.63, and 2.89%, respectively, as compared to the baseline period (1988-2018) which is often associated with a decline in rainfall. Likewise, under the RCP 8.5 scenario, the modeling results show a decrease in Q, WY, and AET during the studied periods. Overall, this study shows that the decreasing projected rainfall in the Gidabo sub-basin (southern Ethiopia) would result in lesser availability of soil moisture for crop production. Hence, watershed development and management practices and water allocation systems need to be put to minimize the adverse impacts of climate change on agriculture, water supply, and other sectors.