The University of Saskatchewan’s Centre for Hydrology was established as a response to:

• A nationally-recognised need for an improved scientific basis to water management
• The increasing importance of interdisciplinary contributions in hydrological theory, observational and modeling capability towards improved prediction of water resources
• The growing number of high-calibre academic and government scientists in hydrology and related water sciences in Saskatoon

The University has played a central role in Canadian hydrology since the 1960s, when Professor Don Gray and colleagues established and developed a strong research and training program at the Division of Hydrology (in existence from 1964 to 2001). The Division hosted a series of seminars on the Principles of Hydrology, which were attended by aspiring hydrologists from across Canada. Don Gray later published the first textbook on Canadian Hydrology, the Handbook on the Principles of Hydrology in 1970, and - with David Male - the pioneering Handbook of Snow: Principles, Processes, Management and Use, in 1981.

In 1986, the critical mass of hydrological research in Saskatoon was additionally bolstered when Environment Canada established its National Hydrology Research Centre (part of the National Water Research Institute, NWRI), and the Hydrometeorological Research Division of the Atmospheric Environment Service (now the Meteorological Service of Canada, MSC), at Innovation Place on the University's campus. Subsequent arrivals at NHRC included the Prairie Farm Rehabilitation Administration of Agriculture and Agrifood Canada, and the Hydrometeorology and Arctic Laboratory (HAL) of Environment Canada.

The Centre for Hydrology was established as part of the Environment Initiative detailed in the University of Saskatchewan Integrated Plan of 2004, which stated:

The new Centre for Hydrology will restore our academic pre-eminence in the hydrological sciences to better address Saskatchewan's water sustainability problems and to provide national leadership in hydrological research and training.

The Centre will coordinate graduate student training, outreach and research; provide shared laboratory and experimental research basin facilities to researchers from the College of Agriculture, Arts and Science, Engineering, and the National Water Research Institute on campus, and develop major funded programs addressing water and environmental change.

Hydrological research opportunities continue to improve at the University of Saskatchewan. The Canada Research Chairs program, the Natural Science and Engineering Research Council of Canada, the Province of Saskatchewan and the University have invested nearly $3 million in facilities and special positions for the Centre for Hydrology. The Centre retains strong linkages with Environment and Climate Change Canada and the Provincial Government’s Water Security Agency, with interest in applying advanced solutions to water resource issues. The Centre for Hydrology contributes hydrology to Global Institute for Water Security and provides leadership for the CFREF-funded Global Water Futures programme.