Building water saving is an important way to conserve water resources in urban areas, and the implementation of water-saving projects in universities as a large-scale public building will bring good externality. To calculate water saving and emission reduction externality of water-saving project quantitatively, the definition of externality of public building water-saving projects is firstly defined based on the externality theory, and the cost-benefit theory is applied to establish the thinking of externalities and monetization of public building water-saving project. Next, the water saving system of public buildings is introduced and the externality measurement formula for water saving projects is deduced.t In the end, the water consumption data of a university in Beijing in 2016 is analyzed. The results show that water saving technology can achieve the annual per capita water saving of 16.6m3, and public building water-saving rate reached 42% with the use of water-saving technology. The water-saving externality of a university is ￥ 4.7656 million, the externality of pollution reduction is ￥ 2.6482 million, and the total externality is ￥7.4138 million, and the externality benefits are good.