Abstract: For the purpose of solving problem of global water environment pollution, China has been carrying out a major institutional innovation-the River Chief System (RCS). Facing the dilemma of environmental protection and economic development, it is urgent to explore whether the RCS can achieve the double dividend of economic growth and environmental governance.Using the RCS as a quasi-natural experiment, we empirically examined the effects of water environment management policies on the development of economic green transformation and their driving mechanisms,by employing the progressive difference-in-differences method, based on a panel data of 108 prefecture-level cities in the Yangtze River Economic Belt from 2006 to 2019. The results showed:(1) The implementation of the RCS had a significant effect on pollution control and could significantly promote the economic green transformation of the Yangtze River Economic Belt. In addition, with the strengthened implementation of the RCS, a stronger effect had been indicated on the promotion of the green economic transformation.(2) The effect of the RCS in the downstream region was more significant in promoting the economic green transformation. Stronger efforts were shown in the low pollution areas, and the green effects of the RCS were especially prominent in the cities with high level of economic development. (3) The RCS could promote the economic green transformation development by stimulating green technology innovation and promoting industrial structure upgrading. The official incentive played an important role in moderating the effects of the RCS in promoting the economic green transformation development.