Human activities coupled with climate change impacts are becoming the main factors in decreasing inland surface water quantity and quality, leading to the disturbance of the aquatic ecological balance. Under such conditions, the introduction and proliferation of aquatic invasive alien species are more likely to occur. Hence, frequent surface water quality monitoring is required for aquatic ecosystem sustainability. The main objectives of the present study are to analyze the seasonal variation in the invasive plant species water hyacinth (Pontederia crassipes) and biogeochemical water quality parameters, i.e., chlorophyll-a (Chl-a) and total suspended matter (TSM), and to examine their relationship in Lake Tana (Ethiopia) during a one-year study period (2020). Sentinel-2A/B satellite images are used to monitor water hyacinth expansion and Chl-a and TSM concentrations in the water. The Case 2 Regional Coast Colour processor (C2RCC) is used for atmospheric and sunglint correction over inland waters, while the Sen2Cor atmospheric processor is used to calculate the normalized difference vegetation index (NDVI) for water hyacinth mapping. The water hyacinth cover and biomass are determined by NDVI values ranging from 0.60 to 0.95. A peak in cover and biomass is observed in October 2020, just a month after the peak of Chl-a (25.2 mg m−3) and TSM (62.5 g m−3) concentrations observed in September 2020 (end of the main rainy season). The influx of sediment and nutrient load from the upper catchment area during the rainy season could be most likely responsible for both Chl-a and TSM increased concentrations. This, in turn, created a fertile situation for water hyacinth proliferation in Lake Tana. Overall, the freely available Sentinel-2 satellite imagery and appropriate atmospheric correction processors are an emerging potent tool for inland water monitoring and management in large-scale regions under a global change scenario.