A distressed project is whenever the performance of a project falls outside nominalrnvalues. Project distress can occur at any time during the life of a project, which couldrnmake it difficult for the project to be completed successfully within project constraints.rnThe objective of this research is to assess the cause and prevention project of distressrnmanagement on wastewater treatment project in Addis Ababa Water Sanitation andrnAuthority. This paper used qualitative approach and case study strategy by means ofrnnarrative qualitative analysis. The findings implied that the Package WastewaterrnTreatment Plant Electromechanical Supply and Civil Work construction (Lot II) projectrnwere distressed in its life time of the project. The main cause of distress was selection ofrninappropriate technology, lack of cash flow and economical inflation; poor planning;rnissue related with scope change management; issue related to resource management;rnimproper risk management and issue to stakeholder management. The preventionrnmanagement strategy used to avoid distress in the project was periodic reviews. Based onrnthe findings, recommendations are given. Before the selection of technology it isrnnecessary to conduct a feasibility study that incorporates the local condition of the city.rnThe project planning should also be conducted by gathering the necessary primary datarnand secondary data to estimate the schedule according to the current market condition ofrnthe resource. Rectifying the above causes of project distress will help in minimizing thernoccurrence of distress however having an effective prevention management strategy willrnplay a significant role. The several tools and process to prevent project (i.e. dynamic riskrnmanagement; scope change management and others) must be in place which are thernfinest way to detect early warning signs of distress. The prevention managementrnstrategies is also important that the implementation of the tools and process to preventrndistress must be strictly followed deliberately.