In order to identify nano-additives that can effectively enhance drag reduction performance of thixotropic slurry used in pipe jacking construction of water diversion projects, an orthogonal test with three factors and five levels was designed to obtain an optimal slurry formulation suitable for engineering practice. On this basis, reduced-scale physical model tests were conducted to investigate the effects of different nano-additives on the slurry’s drag-reduction performance. The results show that the bentonite content has a significant influence on the slurry’s viscosity, fluid loss, and filter-cake thickness, the CMC content greatly affects fluid loss and viscosity, and the sodium carbonate content mainly increases the slurry’s pH value, while only slightly affecting viscosity and fluid loss. Consequently, the optimal formulation was determined as 10% mass fraction of bentonite, 0.3% of CMC, and 0.32% of sodium carbonate. The friction reduction efficiency of the nano-additives is generally within 0.4 to 0.6 and decreases with increasing contact pressure between the pipe and soil. After applying petroleum jelly, the pipe surface becomes smoother, and both the friction force and pipe-soil cohesion are reduced. Nano carbon powder and nano zinc oxide can reduce the pipe-soil friction coefficient, and all nano-materials can reduce pipe-soil cohesion. For practical water diversion projects, nano zinc oxide is recommended as a preferred additive.