Conventional methods of quantifying sediment deposition in reservoirs, such as hydrographic surveys and inflow outflow methods are cumbersome, costly and time consuming. Further, prediction of sediment deposition profiles using empirical and numerical methods requires a large amount of input data and the results are still not encouraging. Here we presented the use of satellite remote sensing technique in conjunction with GIS and image processing software to compute the temporal change in water spread area of reservoirs. These areas were then used as input to compute the live storage capacity of the reservoir between maximum and minimum water level elevations. The methodology was tested in Koga, Shina and Selamko reservoirs all in the Upper Blue Nile Basin where there exists bathymetric data to compare results. Results indicated that Koga reservoir has reduced from 83.10 to 81.179 Mm3, showing annual storage loss of 0.33%. For Shina and Selamko reservoirs annual storage loss due to sediment deposition was found to be 1.67% and 2.29% exceeding the annual average worldwide rate for reservoir sedimentation of 1%. Consequently, the annual rate of sedimentation was found to be 27×104 m3/year for Koga, 2.1136×104 m3/year for Shina and 2.3755×104 m3/year for Selamko reservoir. Those values are found to be in close correspondence with results obtained from the bathymetric survey