In this study, we assessed the impact of climate change (CC) on the water balance of the Lake Hawassa catchment (a sub-catchment of the Rift Valley basin) in southern Ethiopia. The CMhyd (Climate model data for hydrologic modeling) was used to correct biases in the Representative Concentration Pathway (RCP) scenarios under the Hadley Global Environment Model 2-Earth System (HadGEM2-ES) for the 2050s (2041–2070) and 2080s (2071–2100). The CC impact analysis performed by the Soil and Water Assessment Tool (SWAT) demonstrated very reliable performance during the calibration (NSE = 0.81, R2 = 0.61) and validation (NSE = 0.85, R2 = 0.88) periods. Projected precipitation (PPT) is expected to increase by 3.4% and 6.9% in the 2050s, and reduce by 1.5% and 0.2% in the 2080s, respectively for the RCP4.5 and RCP8.5, while, respectively, minimum and maximum temperatures (Tmin and Tmax) are expected to increase by 0.6 °C and 3.2 °C under RCP4.5 and by 1.6 °C and 3.8 °C under RCP8.5. By the end of 2100, the long-term water balance of Lake Hawassa catchment under RCP4.5 and RCP8.5 showed PPT increased by 7.1% and reduced by 11.6%, surface runoff increased by 8.8% and reduced by 16.2%, lateral discharge reduced by 40.5% and 49.8%, water yield reduced by 19% and 39.4%, evapotranspiration increased by 21.1% and 19.2%, and potential evapotranspiration increased by 76.1% and 76.7% respectively. These results indicate that the water balance of the catchment will be altered by CC. Therefore, constantly monitored and updated sustainable water resource management and development is required.