Assessing sustainability of coastal groundwater is significant for groundwater management as coastal groundwater is vulnerable to over-exploitation and contamination. To address the issues of serious groundwater level drawdown and potential seawater intrusion risk of a multi-layered coastal aquifer system in Zhanjiang, China, this paper presents a numerical modelling study to research groundwater sustainability of this aquifer system. The transient modelling results show that the groundwater budget was negative (−3826×104 to −4502×104m3/a) during the years 2008–2011, revealing that this aquifer system was over-exploited. Meanwhile, the groundwater sustainability was assessed by evaluating the negative hydraulic pressure area (NHPA) of the unconfined aquifer and the groundwater level dynamic and flow velocity of the offshore boundaries of the confined aquifers. The results demonstrate that the Nansan Island is most influenced by NHPA and that the local groundwater should not be exploited. The results also suggest that, with the current groundwater exploitation scheme, the sustainable yield should be 1.784×108m3 /a (i.e., decreased by 20% from the current exploitation amount). To satisfy public water demands, the 20% decrease of the exploitation amount can be offset by the groundwater sourced from the Taiping groundwater resource field. These results provide valuable guidance for groundwater management of Zhanjiang.