Uncontrolled groundwater outbursts from underlying limestone aquifers into mining excavations present a significant safety challenge for underground coal mining in China. Although these mining hazards have been known for decades, the mechanism for groundwater outbursts remains elusive. A fully coupled flow-stress-damage model is presented to simulate the progressive development of fractures and the associated groundwater flow under incremental loading conditions resulting from mining processes. The model is based on classical theories of porous media flow and damage mechanics and importantly links changes in permeability with the accumulation of damage in following the complete stress–strain process. This coupled flow-stress-damage model is applied to examine the influence of mining advance on the initiation, extension, and evolution of an outburst conduit as it develops adjacent to the mine panel. Fractures are shown to initiate both from the wings of the excavation in shear, and from the center of the floor span, in extension. The growth of the extensile fractures is stunted by the presence of a high stress abutment, but the wing fractures extend, with one fracture becoming dominant. As the dominant fracture develops into the underlying over-pressured zone, water pressures transmitted along the now-open conduit reduce effective stresses and develop rapid heave displacements within the floor. The result is a groundwater outburst. The modeling is tuned to the results of laboratory experiments and follows the evolution of a viable outburst path. Observations corroborate with field measurements of permeability pre- and post-mining and are strong indicators of the veracity of the approach.