Water scarcity coexists with low water-use efficiency in the irrigation areas of the Tarim River Basin. Promoting the new era karez water-saving technology is an effective solution, yet its water-saving potential still lacks systematic assessment. This study evaluated the water-saving potential of the irrigation areas in Tarim Basin when new era karez is implemented in 20% of the region from three perspectives: agricultural irrigation water diversion, water consumption, and water diversion considering ecological water demand. The results indicate that the savings of agricultural irrigation water diversion reached 1.572 billion m3, while that of water consumption amounted to 0.89 billion m3. Ecological water demand accounted for 0.087 billion m3 after the implementation of karez, resulting in water diversion savings of 1.485 billion m3 when ecological needs were considered. The implementation of new era karez improved the irrigation water use coefficient significantly; however per-hectare water diversion savings varied substantially across irrigation areas due to differences in existing canal system efficiency. Additionally, new era karez facilitated the development of high-efficiency field water-saving practices, further enhancing water-saving potential in the irrigation areas. This study provides a reference for the pipeline-based modernization development of canal irrigation systems.