This paper considers the sectoring of a large water distribution network into district metered areas (DMAs) and simultaneously optimizes rehabilitation of the network with new pipes, control valves, and storage tanks. Because available water resources are much lower in the dry season, both the design and operational settings are optimized to satisfy water-demand, water-quality, and pressure constraints, as well as efficiency indices under stringent conditions. Because of the heterogeneity of the multiple decision variables and the complicated way they interact through the multiple objectives (some complimentary and some conflicting), it is not possible to fully automate the simultaneous sectorization, rehabilitation, and operational optimization. Therefore, a multistage approach is used where engineering judgment and network graph simplification and visualization tools are used to find a good feasible solution that serves as a first guess for further optimization of sectors and operational settings, to achieve feasible solutions with better cost of implementation, demand similarity among DMAs, and better pressure uniformity in operations. A multiobjective agent swarm optimization framework is used to iteratively change the sectors at the boundaries. For the final configuration, sequential linear programming is used to find optimal valve and pump settings.