The desalination sector adopts Minimal Liquid Discharge (MLD) systems to become more circular, reduce brine discharge and enhance water recovery, which transforms them to multifunctional systems. This multifunctionality requires a methodologically consistent and goal-aligned approach to environmental impact assessment that recognises how different modelling choices are connected with specific decision contexts. A criterion LCA-based framework aligned with the ISO 14044 hierarchy and tailored specifically to desalination has been developed. It guides the selection of allocation approaches based on system characteristics, integration level, and assessment objectives and is applied to assess an MLD system which co-produces desalinated water, sodium chloride, magnesium hydroxide, calcium hydroxide, sodium sulphate and hydrochloric acid. Multifunctionality was handled with system expansion and partitioning (physical and economic) approaches, resulting in different functional units. For physical and economic partitioning, the MLD system is modelled from a process and system perspective. The results indicate that the MLD system has larger environmental benefits than the reference system with system expansion. When physical and economic partitioning under different perspectives are applied, they result in different environmental burdens per co-product. The MLD system performs better than the reference system (0.005 kg CO₂/kg desalinated water) only when process economic partitioning (0.003 kg CO₂/kg desalinated water) is applied. Whereas, the rest co-products perform better than reference products for all partitioning approaches applied. Our results highlight the potential of brine as a secondary source of products. This study underscores the importance of selecting appropriate allocation approaches, contributing to sustainable practices in the desalination sector.