The main management challenge in coastal aquifers is to prevent saltwater intrusion, still ensuring ample supply of freshwater. Saltwater intrusion happens due to unregulated pumping from production wells. Therefore, it is essential to have effective management policy, which ensures the requisite amount of freshwater to be withdrawn from coastal aquifers without causing saltwater intrusion. To achieve these conflicting objectives, a methodology for optimizing production well locations and maximizing pumping from production wells is presented. Location of pumping wells directly affects the amount of freshwater that can be pumped out of costal aquifer. Simultaneous optimization of production well locations and pumping from the same is achieved by linking mathematical simulation models with optimization algorithm. A new methodology using coupled sharp-interface and density dependent simulation models is developed to find optimal well locations and optimize the amount of freshwater pumped from the coastal aquifer. The sharp-interface model is linked with Simulated Annealing to solve this constrained optimization problem. In the next step, density dependent model is used to improve the outcome of sharp-interface model. The process is iterated until the results of the sharp-interface mimic the results of density dependent model which is more realistic, as it considers both advection and dispersion phenomenon. The performance of the developed methodology is evaluated for saltwater intrusion in coastal city of Puri, India. The performance evaluation results show the applicability of the developed methodology for management of saltwater intrusion while maximizing freshwater pumping in coastal aquifers under constraints of well location.