Underground water and wastewater pipelines are vital for city operations but plagued by anomalies like leaks and infiltrations, causing substantial water loss, environmental damage, and high repair costs. Conventional manual inspections lack efficiency, while dense sensor deployments are prohibitively expensive. In recent years, artificial intelligence has advanced rapidly and is increasingly applied to urban infrastructure. In this research, we propose an integrated AI and remote-sensor framework to address the challenge of leak detection in underground water pipelines, through deploying a sparse set of remote sensors to capture real-time flow and depth data, paired with HydroNet - a dedicated model utilizing pipeline attributes (e.g., material, diameter, slope) in a directed graph for higher-precision modeling. Evaluations on a real-world campus wastewater network dataset demonstrate that our system collects effective spatio-temporal hydraulic data, enabling HydroNet to outperform advanced baselines. This integration of edge-aware message passing with hydraulic simulations enables accurate network-wide predictions from limited sensor deployments. We envision that this approach can be effectively extended to a wide range of underground water pipeline networks.