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Place the watermelon, lime juice, sugar and 1 cup of the water in a blender. Blend until smooth.
Strain the watermelon mixture into a pitcher and discard solids. Add the remaining water to the pitcher and stir to combine. Chill until ready to serve.
For garnishes: if desired, dip the rims of the glasses into a bowl of water then place the glasses, rim side down, onto a plate of coarse sugar and rotate until rims are coated with sugar. Pour agua fresca into the sugar rimmed glasses and top with mint sprigs, lime slices and/or watermelon wedges.