The study evaluated the impact of a multidimensional child cash grant (CCG) programme on safe water, sanitation and hygiene (WASH) outcomes. The intervention district received a CCG providing 200 Nepalese Rupee per month for up to two children for poor families with children under five, a capacity building component for effective child sensitive social protection, and behaviour change activities in addition to existing standard social welfare services in the form of targeted resource transfers (TRTs) for eligible families. The control district received only TRTs for eligible families. Propensity scores were used in difference-in-differences models to compare the changes over time between the intervention and control groups. The intervention resulted in a 5.5% (p < 0.01), 46.6% (p < 0.001) and 42.2% (p < 0.001) percentage points reduction in the proportion of households reporting drinking water from unimproved sources, having unimproved sanitation facilities, and practising unsanitary disposal of children's faeces, respectively. However, the prevalence of households practising inadequate water treatment methods did not differ between the intervention and comparison districts. In order to achieve WASH coverage in Nepal, strategies to scale up the intervention need to consider a social protection programme embedding different financial incentive and integrated capacity mechanisms.