A high proportion of non-rewenue water can appear in water distribution systems which is often due to water losses. By establishing district metered areas (DMAs), a water balance can be calculated from the difference between the measured flow and the amount of revenue water. This allows system operators to identify the actual water losses faster and to control the functioning of the water distribution system efficiently. We present an efficient graph theoretical method for automatic design of district metered areas (DMAs) in water distribution networks (WDNs). The proposed method consists of two main parts: WDN partitioning and DMA connection, and is tested on a real-life WDN, for which three spectral partitioning methods, multiple weight cases and two clustering criteria are compared. The efficiency of the proposed DMA connection algorithm, with respect to the traditional combinatorical approach, is shown for different numbers of established DMAs. The final solution is selected according to a multi-criteria evaluation model, which was developed in order to reduce the subjective influence in the selection process and considers hydraulic, cost and topological criteria. The results show, that all three tested spectral partitioning methods, the ratio cut, the normalized cut and the newly proposed modified normalized cut, are suitable for WDN partitioning and, that we can further improve the quality of the obtained solutions by considering appropriate topological and cost based WDN information in the partitioning process.