Macromolecular recognition and ligand binding are at the core of biological function and drug discovery efforts. Water molecules play a significant role in mediating the protein-ligand interaction, acting as more than just the surrounding medium by affecting the thermodynamics and thus the outcome of the binding process. As individual water contributions are impossible to measure experimentally, a range of computational methods have emerged to identify hydration sites in protein pockets and characterize their energetic contributions for drug discovery applications. Even though several methods model solvation effects explicitly, they focus on determining the stability of specific water sites independently and neglect solvation correlation effects upon replacement of clusters of water molecules, which typically happens in hit-to-lead optimization. In this work, we rigorously determine the conjoint effects of replacing all combinations of water molecules in protein binding pockets through the use of the RE-EDS multistate free-energy method, which combines Hamiltonian replica exchange (RE) and enveloping distribution sampling (EDS). Applications on the small bovine pancreatic trypsin inhibitor and four proteins of the bromodomain family illustrate the extent of solvation correlation effects on water thermodynamics, with the favorability of replacement of the water sites by pharmacophore probes highly dependent on the composition of the water network and the pocket environment. Given the ubiquity of water networks in biologically relevant protein targets, we believe our approach can be helpful for computer-aided drug discovery by providing a pocket-specific and a priori systematic consideration of solvation effects on ligand binding and selectivity.