Groundwater plays a vital role in the arid inland river basins, in which the groundwater management is critical to the sustainable development of area economy and ecology. Traditional sustainable management approaches are to analyze different scenarios subject to assumptions or to construct simulation–optimization models to obtain optimal strategy. However, groundwater system is time-varying due to exogenous inputs. In this sense, the groundwater management based on static data is relatively outdated. As part of the Heihe River Basin (HRB), which is a typical arid river basin in Northwestern China, the Daman irrigation district was selected as the study area in this paper. First, a simulation–optimization model was constructed to optimize the pumping rates of the study area according to the groundwater level constraints. Three different groundwater level constraints were assigned to explore sustainable strategies for groundwater resources. The results indicated that the simulation–optimization model was capable of identifying the optimal pumping yields and satisfy the given constraints. Second, the simulation–optimization model was integrated with wireless sensors network (WSN) technology to provide real-time features for the management. The results showed time-varying feature for the groundwater management, which was capable of updating observations, constraints, and decision variables in real time. Furthermore, a web-based platform was developed to facilitate the decision-making process. This study combined simulation and optimization model with WSN techniques and meanwhile attempted to real-time monitor and manage the scarce groundwater resource, which could be used to support the decision-making related to sustainable management.