To mitigate eutrophication by enhancing water exchange in Lake Taihu, the third largest freshwater lake in China, a water transfer project was initiated in 2002. The project was designed to flush pollutants out of the lake by transferring water from the Yangtze River. However, the original Yangtze River Diversion did not significantly enhance water exchange in the Meiliang Bay, the most polluted area of Lake Taihu. To overcome this deficiency, the improved Yangtze River Diversions have been designed recently by adding two new pump stations named Meiliang and Xingou around Meiliang Bay. Effectiveness of water transfer projects was investigated in this study by using a three-dimensional hydrodynamic model, Environmental Fluid Dynamics Code (EFDC), based on the concept of water age. Model results showed that adding new pump stations significantly improved the effectiveness of Yangtze River Diversion in Meiliang Bay. Success of water transfer is also strongly associated with the inflow or outflow rate of water transfer projects and wind conditions. Southeastern winds which dominate in summer increase performance of water transfer and improve water exchanges in Meiliang Bay. Considering water age and cost, an economically effective influent flow rate from Wangyu River (the original Yangtze River Diversion) was predicted to be 120 m3/s, and the corresponding appropriate outflow rate from the Meiliang pump station was about 15–20 m3/s on the basis of multi-objective optimization method, which decreased the average water age in Meiliang Bay by 24.32% of the original Yangtze River Diversion. Adding Xingou pump station had the similar contribution to reducing the water age in Meiliang Bay as the Meiliang pump station. In general, the improved Yangtze River Diversions played a supplementary role for the original Yangtze River Diversion in solving algal bloom problems in Meiliang Bay.