Hindu Hush Himalaya (HKH) constitutes headwater of large transboundary river-basins that sustain one-fourth global population. Climate change has stressed hydrological regimes of Himalaya and increased frequency of floods and drought causing substantial decrease in water availability. These changes in climatic conditions have not increased proportion of water, food, health and livelihood insecure population both in mountains and densely populated lowlands, but also have enormous regional implications for fundamental human endeavours ranging from poverty alleviation, climate change adaptation to sustainability transformation across South Asia. In addition, decreased availability of water and surging risks of flood and droughts have also threatened the peace and security in the entire region. Hence, it is necessary to evolve a multilateral transboundary river-basin cooperation framework among the riparian countries to support sustainability transformation in South Asia under climate change. Study navigated geo-political challenges and emerging power dynamics impeding regional cooperation, and conceptualized an institutional architecture to initiate hydro-diplomacy among riparian countries based on; (i) extensive literature survey; (ii) key respondents’ interviews; and (iii) focussed-group discussion with a range of institutions, political leadership, government officials, academia and non-governmental and civil society organizations across riparian countries. Study observed that geo-politically as well as socioeconomically South Asia is one of the most fragmented regions in the world, and growing power-disparities, economic imbalances, political distrust and conflictual inter-state dynamics have frozen hydro-diplomacy. However, common environmental and economic benefits of transboundary river cooperation that include: (i) integrated flood forecasting system; (ii) storing water in upstream river-basins for flood and drought mitigation; (iii) joint hydropower projects; and (iv) managing headwaters for increasing availability and access to water would stimulate riparian countries for multilateral headwater cooperation. It is expected that outcomes of research influence policy decisions to initiate hydro-diplomacy among the riparian countries in Hindu Kush Himalaya and help climate policy planners to realize the inevitability of regional river-basin cooperation to support sustainability transformation under rapidly changing climatic conditions.