The appropriate design of a river diversion system during construction of dam is an essential task since dramatic consequences in view of cost and time overrun may be involved. After a short outline of the different methods of river diversion and its main structural elements, the paper focuses on critical issues in relation with the design of diversion tunnels. For a proper hydraulic functioning of a diversion tunnel a flow acceleration stretch at the entrance is essential, to avoid a too early pressurized flow with rapid increase of the water level upstream of the cofferdam which may lead to overtopping and failure of the latter. The technical challenges of river closure are addressed, which is often a critical phase during construction of a dam. The choice of an economical optimal design discharge of tunnel diversion system is outlined taking into account the risk of flooding of the ongoing onstruction works. In order to reduce the risk of failure of the cofferdams and the diversion tunnel in the case the design flood is exceeded, the design of novel protection methods against erosion of the cofferdam after overtopping as well as against scouring at the outlet of diversion tunnels are presented.