Utilization of Pan Chromatic and Multi Spectral Remote Sensing Imagery is wide spreading and becoming an established business for commercial suppliers of such imagery like ISI and others. Some emerging technologies are being used to generate Hyper-Spectral imagery (HSI) by aircraft as well as other platforms. The commercialization of such technology for Remote Sensing from space is still questionable and depends upon several parameters including maturity, cost, market reception and many others. HSI can be used in a variety of applications in agriculture, urban mapping, geology and others. One outstanding potential usage of HSI is for water quality monitoring, a subject studied in this paper. Water quality monitoring is becoming a major area of interest in HSI due to the increase in water demand around the globe. The ability to monitor water quality in real time having both spatial and temporal resolution is one of the advantages of Remote Sensing. This ability is not limited only for measurements of oceans and inland water, but can be applied for drinking and irrigation water reservoirs as well. HSI in the UV-VNIR has the ability to measure a wide range of constituents that define water quality. Among the constituents that can be measured are the pigment concentration of various algae, chlorophyll a and c, carotenoids and phycocyanin, thus enabling to define the algal phyla. Other parameters that can be measured are TSS (Total Suspended Solids), turbidity, BOD (Biological Oxygen Demand), hydrocarbons, oxygen demand. The study specifies the properties of such a space borne device that results from the spectral signatures and the absorption bands of the constituents in question. Other parameters considered are the repetition of measurements, the spatial aspects of the sensor and the SNR of the sensor in question.