Due to the lack of in-situ gauge data, remote sensing is crucial for water level monitoring. This study presents a thorough examination of water level variations in nine main Sri Lankan reservoirs over the past five years, using data from the Ice, Cloud, and land Elevation Satellite-2 (ICESat-2) Advanced Topographic Laser Altimeter System (ATLAS). An initial data filtering was done focusing on key quality flags in ICESat-2 ATL13 products to ensure data reliability by eliminating outliers and significant elevation errors. An approach to assessing uncertainty in satellite-derived elevation readings is introduced, using photon counts to quantify uncertainty and enhance data interpretation. The evaluation of ICESat-2 data, in comparison to gauge measurements of nine reservoirs, confirms ICESat-2's higher accuracy in water level estimation, yielding a correlative coefficient as high as 0.99 for all reservoirs, though it has a low temporal resolution of 91 days.This study highlights the potential of ICESat-2 for comprehensive water level measuring in small reservoirs, offering valuable insights for effective water resource management and hydrological modelling efforts. Furthermore, the developed methodology can be used for reservoir water level measuring, highlighting the advantage of satellite products, especially in data-scarce regions.