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• Setting up a closed-water loop for water activation based experiments at JSI, Slovenia. • Considering ITER relevant conditions. • Effective water volume of the activation part is essential parameter for obtaining high activity values along the loop. • A pipe radius of 0.6 cm and a water flow rate range between 0.4 l/s and 0.5 l/s were chosen as the optimal configuration. • Estimated activity values of 16N, 17N and 19O within the radiation part are 1.7·108 Bq, 1.2·104 Bq and 1.4·107 Bq. A closed-water activation loop is being built at the research reactor TRIGA at the Jožef Stefan Institute, Slovenia, which will serve as a well-defined and stable high energy gamma-ray and neutron source. The main focus of this work is to analyse and optimise the main components of the water activation loop to achieve the highest activity at reasonably low pressure drop. Both neutronic and hydraulic aspects were considered. The results show that the desired configuration consists of a high effective water volume of the inner activation part, outer observation part and narrow transport pipes connecting both parts. The complex snail-shape design of the inner part systematically outperformed other simplified designs by more than a factor of two for the main water activated isotopes (16N, 17N and 19O). The activity values increase strongly with increasing flow rate, but reach saturation at about 0.5 l/s. On this basis, the snail configuration was selected as the main candidate for both the inner activation and outer observation part. To not exceed the pressure drop of 3 bar within the closed-water loop, the nominal water flow rate and the inner diameter of the transport pipes were set to 0.5 l/s and 1.2 cm, respectively. [ABSTRACT FROM AUTHOR]