For sustainable development of the world, it is crucial to solve the problems related to water environment pollution, water shortage, and the inefficient utilization of water resources during the process of urbanization in developing countries. At present, scholars mainly focus on the measurement of new urbanization (NU) and the water ecological civilization (WEC) level and the coordination relationship between NU and ecological civilization. However, there have been few studies on the coordination relationship between NU and WEC and its driving factors. We take the Yangtze River Economic Belt (YREB) in China as a case study, construct the indicator system of NU and WEC, analyze the current situation of NU and WEC in the YREB, and study the coordination state of NU and WEC in the YREB from 2011 to 2020 by using a state coordination function. We further examine the factors driving the coordination of NU and WEC by employing a two-way fixed-effects model. The results show the following: (1) The growth rate of NU and WEC in the YREB shows a fluctuating upward trend, where there is significant heterogeneity between the upper reaches, the middle reaches, and the lower reaches of the YREB. (2) The static coordination degree of NU and WEC in the YREB shows a trend of fluctuating upwards and then falling, and the dynamic coordination degree deviated from the coordinated development trajectory from 2018 to 2020. The classification of the static coordination degree of various regions in the YREB gradually becomes obvious with significant spatial aggregation characteristics, and the dynamic coordination degree of various regions has significant heterogeneity. (3) The opening-up degree, foreign direct investment, population growth, and urban–rural income gap are not advantageous to the coordination degree, while the marketization level, industrial structure, and human capital are advantageous to the coordination degree, but the regression coefficients of the latter two are not significant. The regional regression results show that the impacts of driving factors on the coordination degree have obvious heterogeneity. The research results provide a new idea and method that can be used by developing countries similar to the YERB to control water pollution, improve the ecological environment, alleviate water shortages, and improve the level of WEC in the process of NU.