The Shihmen Reservoir is the most important source of water supply for domestic, industrial, and agricultural sectors in northern Taiwan. Competition for water demands among the three sectors frequently occurs. In circumstances of prolonged drought, the agricultural water supply is reduced to meet the water demands of the domestic and industrial sectors. In making irrigation decisions, several irrigation scenarios may be proposed and evaluated to reach the final decision. However, the risk of irrigation decision-making often is not fully investigated in the decision-making process. In this study, we present an innovative risk-based irrigation decision-making approach for the Shihmen Reservoir Irrigation District in northern Taiwan. The approach, by considering the initial reservoir storage and the cumulative reservoir inflow, derives the cumulative distribution function of the available volume for irrigation and then calculates the risk of irrigation shortage, defined as the probability that the available volume for irrigation is lower than the irrigation water demand. A severe drought event that occurred in 2021 was used to demonstrate the application of the proposed approach. It was found that the drought mitigation measures taken by the Irrigation Agency for the 2021 drought event ensured a very low risk of irrigation shortage.