Coastal aquifers are highly sensitive natural systems that require careful management and adequate planning in order to ensure that they are not over-exploited. The development of effective management strategies is particularly pertinent to coastal communities faced with increasing population pressures. This paper develops a multidisciplinary approach for the optimal extraction of water from a coastal aquifer. The objective is to maximise the net present value of the net economic benefits of pumping, subject to various hydrological constraints. A nonlinear demand function is used to quantify the benefits of water use, and analytical equations of groundwater flow and saltwater intrusion are used to integrate core principles of hydrology within the economic framework. For the optimisation of drawdown levels, a modified version of the Theis (1935) solution is used to calculate drawdown levels. For the prevention of saltwater intrusion, constraints are calculated using the single-potential sharp-interface solution developed by Strack (1976). The model is then applied to a hypothetical coastal community situated on the East coast of Australia. The results confirm the importance of accounting for spatial heterogeneity and temporal effects when modelling extraction from a complex natural system. In addition, a volumetric price of water is recommended as an efficient policy tool for the control and regulation of demand.