Based on the concept of water rights, we propose water rights trading mechanisms from the perspectives of water rights trading bodies, trading procedures, and corresponding safeguards. Within the process of water rights trading, we should provide a rigorous review of the application for water rights transfer, conduct a comprehensive evaluation of the impact of water rights trading on third parties, and offer interest compensation. The whole process of water rights trading should take place under supervision of the society in order to ensure fair and equitable transfer of water rights. Through analysis of the water rights trading mechanisms and their implementations, water rights trading can proceed smoothly. In the future, the state can establish water rights exchanges at different levels, make full use of the internet and information technology to simplify the water rights trading procedures, and improve the relevant legal systems to provide a corresponding system safeguard for water rights trading.