Reservoirs play a significant role in modifying the spatiotemporal availability of surface water to meet multi-sector human demands. Yet the integrated modelling frameworks that explore the interactions among these systems at global scale, such as Global Change Analysis Model (GCAM), often contain limited representations of water storage dynamics at finer resolution. In this study, we introduce the Global Reservoir Yield (GLORY) optimization model, dynamically linked with GCAM, to enhance GCAM’s representation of reservoir water storage and explore its future role (e.g., expansion) in interactions with multi-sector systems. The new approach improves the representation of reservoir water storage in GCAM in several ways. Firstly, the GLORY model identifies the cost to supply increasing levels of reliable water supply from reservoir storage, considering regional physical and economic dynamics, including evolving monthly reservoir hydrologic inflows and demands, and the levelized cost to construct additional reservoir storage capacity. Secondly, we analyze the potential for reservoir storage capacity expansion, considering constraints related to population, protected land, water sources, cropland. We also examine how climate and socioeconomic impacts influence the pathways for reservoir expansion. Additionally, the pioneering GLORY – GCAM feedback loop allows evolving water demands from GCAM to inform the GLORY model, resulting in an updated supply curve at each time step, and enables GCAM to establish a more meaningful economic value of water. Our findings reveal that the reservoir expansion pathways are sensitive to various physical and economic factors, especially for water-scarce basins. This new approach opens numerous unexplored questions concerning the future of reservoir storage expansion and its multi-sector, multi-system implications under evolving forces such as climate and socioeconomic change.