Collagen type I is well-known for its outstanding mechanical properties which it inherits from its hierarchical structure. Collagen type I fibrils may be viewed as a heterogeneous material made of protein, macromolecules (such as glycosaminoglycans and proteoglycans) and water. Water content modulates the properties of these fibrils. Yet, the properties of water and the fine interactions of water with the protein constituent of these heterofibrils have only received limited attention. Here, we propose to model collagen type I fibrils as a hydrated structure made of tropocollagen molecules assembled in a microfibril crystal. We perform large-scale all-atom molecular dynamics simulations of the hydration of collagen fibrils beyond the onset of disassembly. We found that the structural and dynamic properties of water vary strongly with the level of hydration of the microfibril. More importantly, we found that the properties vary spatially within the 67 nm D-spacing periodic structure. Alteration of the structural and dynamical properties of the collagen microfibril occur first in the gap region. Overall, we identify that the change in the role of water molecules from glue to lubricant between tropocollagen molecules arises around 100% hydration while the microfibril begins to disassemble beyond 130% water content. Our findings are supported by a decrease in hydrogen bonding, recovery of bulk water properties and amorphization of the tropocollagen molecules packing. Our simulations reveal the structure and dynamics of hydrated collagen fibrils with unprecedented spatial resolution from physiological conditions to disassembly. Beyond the process of self-assembly and the emergence of mechanical properties of collagen type I fibrils, our results may also provide new insights into mineralization of collagen fibrils.