Rising population and demands for rice as a staple food have created severe stress on freshwater availability for paddy cultivation. The literature suggests that conventional irrigation techniques are inadequate to overcome the water constraints arising from drought and extreme weather conditions. In the past few decades, there is an upsurge of scientific exploration of agricultural techniques in reinventing traditional methods of irrigation. Recently, alternate wet and dry irrigation (AWDI) method has shown great promise regarding profitable rice cultivation with limited water supply. The AWDI method is a trending water management system, which inundates rice fields with intermittent wet conditions followed by a dry period. This not only ensures adequate water supply but increases crop yield and water productivity index (WPI). The AWDI also helps in reducing parasitic mosquito population in the rice fields by minimizing the field flooding period and curtailing a major part of their life cycles. This review proposes a novel approach of emphasizing AWDI method as an important agricultural tool for supplementing rice fields with limited freshwater, increasing crop yield, and monitoring parasitic mosquito populations. The major objective of this study is to report the state‐of‐the‐art scenario of AWDI method, critically analyze the research gaps related to conventional methods of irrigation and appreciate the futuristic long‐term benefits of AWDI method. Literature survey was performed using search engines like Scopus, PubMed, Google Scholar, Research Gate, Science Direct, and Google Scholar. Comprehensive appraisal of resources (both offline and online) and critical evaluation of AWDI technicalities revealed that the AWDI reduced water usage by 45%, enhanced crop yield and improved WPI in paddy fields in the Asian sub‐continent. The AWDI also curtailed the propagation of lethal mosquito species (Cx. tritaenorhynchus, Cx. vishnui, and Cx pseudovishnui) in rice fields. Therefore, the current study endorses AWDI as a promising substitute of conventional irrigation and a novel approach towards fulfilling water constraints that may be practiced anywhere in the world.