Modeling the flow dynamics of leaks in water pipe networks is an extremely difficult problem due to the complex entangled network structure and hydraulic phenomenon. A mathematical model for leak dynamics in water pipe networks based on consensus algorithm and water hammer theory is proposed. The resulting model is a simple and linearly interconnected system even though the dynamics of water pipe networks has considerable complexity. The model is then validated using experimental data obtained from real pipe network. A comparative study demonstrates the proposed model can describe the real system with high qualitative and quantitative accuracy and it can be used to develop model‐based leak detection and location algorithm based on state estimation. To show applicability of the proposed model, we apply cooperative estimation to the developed model. The results demonstrate the consensus‐based pipe model can be potentially used for leak detection and location with state estimation. © 2017 American Institute of Chemical Engineers AIChE J, 63: 3860–3870, 2017