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In this study, a stress-dependent groundwater model, MODFLOW-SD, has been developed and coupled with the nonlinear subsidence model, NDIS, to predict vertical deformation occurring in basins with highly compressible deposits. The MODFLOW-SD is a modified version of MODFLOW (the USGS Modular Three-Dimensional Groundwater Flow Model) with two new packages, NONK and NONS, to update hydraulic conductivity and skeletal specific storage due to change in effective stress. The NDIS package was developed based on Darcy–Gersevanov Law and bulk flux to model land subsidence. Results of sample simulations run for a conceptual model showed that hydraulic heads calculated by MODFLOW significantly overestimated for confining units and slightly underestimated for aquifer ones. Moreover, it showed that applied stress due to pumping changed initially homogeneous layers to be heterogeneous ones. Comparison of vertical deformations calculated by NDIS andMODFLOW-SUB showed that neglecting horizontal strain and stress-dependency of aquifer parameters can overestimate future subsidence. Furthermore, compared to the SUB (Subsidence and Aquifer-System Compaction) package, NDIS is more likely to provide a more accurate compaction model for a complex aquifer system with vertically variable compression (Cc), recompression (Cr), and hydraulic conductivity change (Ck) indices.