Rapid urbanization, aging infrastructure, high energy demand, and water scarcity challenge the strong reliance and sustainability of centralized municipal wastewater infrastructure. On the other hand, decentralized wastewater treatment systems (DWWTS) have gained popularity as a potential cost-effective alternative compared to costly (capital, operational, and maintenance) centralized wastewater treatment systems (CWWTS). However, determining the extent to which a municipal wastewater infrastructure should be centralized remains a daunting task. Previous studies have attempted to numerically characterize the degree of centralization within areas that have existing infrastructure. Unfortunately, no study has been conducted to determine the degree of centralization for areas without extensive existing infrastructure. This research aims to assess the viability of various decentralized treatment systems, in the context of urban cities with high population densities and potential of water scarcity, by comparing their economic and environmental performances to centralized wastewater infrastructure. Using two wastewater modeling and simulation softwares (GPS-X and CapdetWorks), the technical and economic performance of DWWTs are compared to that of CWWTs. Both suspended and attached growth treatment processes were analyzed. Examples of suspended growth treatment processes include conventional activated sludge (CAS), sequencing batch reactors (SBR) and membrane bioreactor (MBR). Examples of attached growth treatment processes analyzed included trickling filter (TF), rotating biological contactor (RBC) and integrated fixed-film activated sludge (IFAS). This research’s main conclusion is that when keeping the technical performance constant, it is cost-prohibitive to decentralize municipal wastewater infrastructure. This is primarily because when the influent flow is halved, the total treatment cost is not halved. It takes almost the same treatment unit ops to treat half of the flow as it would take to treat the full flow.