In one aspect, a method for reducing uncertainty in a hydraulic model of a water distribution network due to uncertain parameters and faults in the water distribution network is provided which includes the steps of: (i) calculating an optimized placement of sensors throughout a given uncertain section of the water distribution network; (ii) collecting data from the sensors; (iii) partitioning the given uncertain section of the water distribution network into observable and unobservable sub-sections based on the hydraulic model and a) a position, b) a number, and/or c) a type of the sensors that are available; (iv) correcting uncertain parameters and identifying faults for each of the observable sub-sections; (v) calculating a global uncertainty value for each of the unobservable sub-sections; and (vi) repeating the steps (i)-(vi) iteratively, at each iteration selecting an uncertain sub-section of the water distribution network, until no uncertain sub-sections of the water distribution network remain.