Hydrogeologists and other water experts agree on that the effective groundwater management requires: firstly, a good understanding of the aquifer system; secondly, identification of practical measures to control abstraction; and thirdly, improvement in groundwater resource through artificial recharge. A 16 years’ pumping test and drilling lithology data and productive 29 wells were used to characterize the aquifer parameters of the Hawassa City, Ethiopia. The aquifer system was characterized physically, potentially, spatially, quantitatively, and qualitatively using AquiferTest software by applying Moench method to pumping test response data considering the basic assumptions in the model. Weathered and fractured pumice, basalt Scoriaceous rocks, fine-to-coarse-grained sand, and weathered ignimbrites are major water-bearing formations found from the analysis. High porosity and permeability due to these fractures are found to be a risk for the easy contamination of the ground water from surface wastes especially at the shallow aquifer water areas. Spatially, the southern corner and the lake shore of the city were identified as a huge potential area. Percentage of recovery results are 95–100% and transmissivity varies from 4.77 × 10−4 m2/s to 1.75 × 101 m2/s. This follows the general pattern of increasing value from east to west, that is, the value increases from the upper part of the basin to the lower. Moreover, the annual ground flow vector map of the area was developed using static water level data to see the direction of subsurface flow in the area. Accordingly, a large magnitude of water flowing from the central and west directions to the lake shore is identified showing similar profile with the surface flow.