Cyprus is the third largest island of the Mediterranean Sea with an average area of 9,251 square kilometers and with an intense Mediterranean climate with an average annual precipitation around 476 mm. The annual water availability is less than 500 m3/capita and so far it has developed more than 75 percent of the natural water resources, and has implemented sea water desalination and re-use of the treated domestic effluents. Its legal framework vests ownership of the water resources to the Government and it gives to the Government the power to construct waterworks and sell water at prices approved by the Parliament. It also gives the right to physical and legal entities to drill their own borehole and abstract groundwater and the right to organized communal entities to construct their own water works for surface and ground water development and utilization. The law is now adapted to comply with the water framework Directive. Cyprus prepared its water master plan in the 1970's and its implementation lasted for more than 30 years, with almost all surface water resources developed and the groundwater over-pumped. However, due to the observed climate changes and the repeated droughts the island faced serious periods of water shortages during the decade of the 1990's. To adapt to drought and minimize its adverse effects Cyprus was forced to modify its water policy by the introduction of seawater desalination, to accelerate the construction of new water projects and the recycling of the domestic effluents, to intensify the water demand management methods, and finally to develop and implement drought mitigation plans.