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<p>Water resources infrastructure is critical for energy and food security; however, the development of large-scale infrastructure, such as hydropower dams, may significantly alter downstream flows, potentially leading to water resources management conflicts and disputes. Mutually agreed upon water sharing policies for the operation of existing or new reservoirs is one of the most effective strategies for mitigating conflict, yet this is a complex task involving the estimation of available water, identification of users and demands, procedures for water sharing, etc. A water sharing policy framework that incorporates reservoir operating rules optimization based on conflicting uses and natural hydrologic variability, specifically tailored to drought conditions, is proposed. First, the trade-off between downstream and upstream water availability utilizing multi-objective optimization of reservoir operating rules is established. Next, reservoir operation with the candidate (optimal) rules is simulated, followed by their performance evaluations, and the rule selections for balancing water uses. Subsequently, a relationship between the reservoir operations simulated from the selected rules and drought-specific conditions is built to derive water sharing policies. Finally, the reservoir operating rules are re-optimized to evaluate the effectiveness of the drought-specific water sharing policies. With a case study of the Grand Ethiopian Renaissance Dam (GERD) on the Blue Nile river, it is demonstrated that the derived water sharing policy can balance GERD power generation and downstream releases, especially in dry conditions, effectively sharing the hydrologic risk in inflow variability among riparian countries. The proposed framework offers a robust approach to inform water sharing policies for sustainable management of water resources.</p>