The European energy system is undergoing a significant transformation: decarbonization, security of supply, deployment of renewables and their integration into the market, generating significant opportunities and challenges for energy stakeholders. Despite all energy efficiency efforts, overall demand for decarbonized electricity is set to be significantly higher in 2050 than today due to the decarbonization of the heating, cooling, transport and many industrial sectors, which can only be achieved via efficient and smart electrification. Hydropower is a key technology in supporting the European pathway to a decarbonized energy system and to achieve global leadership in renewable energy generation. It consists a renewable and highly sustainable electricity resource and can supply the European power system with stability and valuable flexibility. In addition, hydropower reduces EU’s dependency on fossil imports and renders multiple extra benefits for society in the river basins such as support to irrigation, water supply and flood control. The D-HYDROFLEX project will advance excellence in research on digital technology for hydropower paving the way towards more efficient, more sustainable, and more competitive hydropower plants in modern power markets. D-HYDROFLEX will develop a toolkit for digitally ‘renovating’ the existing hydroelectric power plants based on sensors, digital twins, AI algorithms, hybridization modelling (power-to-hydrogen), cloud-edge computing and image processing. The core pillars of the project will be: (i) digitalization, (i.e., digital twins for hydro dams and machinery, weather and flow forecasts, cyber-resilience), (ii) flexibility, (i.e., coordination with hydrogen, storage and VPP operation) and (iii) sustainability, (i.e., biodiversity environmental issues). Validation will take place in real hydro plants of EDF (France), TEE (Poland), PPC (Greece), TASGA (Spain) and INTEX (Romania), covering different geographical areas of Europe.