To increase the lake capability of flood control and water supply, a new flood control and disaster reduction scheme in Dongting Lake is proposed, which is “river-lake separation” scheme. Taking the 1996 flood of Dongting Lake as an example, the effect of the new scheme on flood control in Dongting Lake area and the lake’s water storage from 1996 to 2014 was studied by numerical simulation method. The results show that with the application of the new scheme, the effective flood control capacity could increase from 20.91×108 m3 under the natural condition to 119.01×108 m3 if a flood type of 1996 occurred. Therefore, the peak water level could be reduced significantly. It is found that the Dongting Lake has great water storage potential, with the application of this scheme it can exceed 18.0×108 m3 even in the extreme drought years of 2006 and 2011. Hence, the seasonal water shortage can be significantly alleviated in Dongting Lake area with“river-lake separation” scheme.