The shallow Murtal aquifer south of Graz, Austria, provides easily withdrawable groundwater, which is supplied as drinking water without any chemical treatment. The aquifer is also used intensively by agriculture. Common agricultural management practices are the main source for diffuse nitrogen leaching and high groundwater nitrate concentrations. To safeguard the coexisting use of these two important resources, lysimeters are operated at the agricultural test site Wagna, Austria, and the influence of two beneficial management practices – low nitrogen input and organic farming – on nitrogen leaching towards groundwater is investigated. The technical lysimeter design as presented here consists of: (1) high-resolution weighing cells, (2) a suction controlled lower boundary condition for sucking off seepage water, thus emulating undisturbed field conditions, (3) comparative soil temperature, water content and matrix potential measurements inside and outside the lysimeter at different depths, (4) an installation of the lysimeters directly into test plots and (5) a removable upper lysimeter ring enabling machinery soil tillage. Our results indicate that oasis effects or fringe effects of the lysimeter cylinder on unsaturated water flow did not occur. Another lysimeter cultivated with lawn is operated for observing grass-reference evapotranspiration, which resulted in good agreement with calculated grass-reference evapotranspiration according to the FAO-Penman–Monteith method. We conclude that lysimeters installed at Wagna test site did not show any fringe effects and, thus, are appropriate tools for measuring water balance elements and nitrogen leaching of arable and grass land at point scale. Furthermore, our results for the period of 2005 to 2011 show that beneficial management practices reduced nitrate leaching and, hence, may allow for a sustainable coexistence of drinking water supply and agriculture in the Murtal aquifer.