"All options are open to deal with Ethiopian dam, and Egypt should protect and defend its water interests," Ayman Ali said at a press conference.
While acknowledging other nations' rights, Ali said "we must guarantee that the dam will not harm Egypt, otherwise all options will be open."
"It's important to complete the required studies before beginning the construction of this dam, and Egypt should follow up all the construction phases," Ali said.
The advisor said that the dam is "an issue of national security " and it needs "a unified national stance", adding that a national committee has been formed to deal with the issue and that Egypt hopes to open negotiations to achieve mutual benefit for all the Nile Basin countries.
Last month, Ethiopia started diversion of the course of the Blue Nile, one of the River Nile's two basic tributaries, as a preparatory step for building its aspired Renaissance Dam.
The move raised concerns in Egypt over its share of river water as one of the two downstream Nile Basin countries.
On Monday, President Mohamed Morsi held a national dialogue session with different political forces and parties to discuss a report by the tripartite technical committee on Ethiopia's Renaissance Dam.
During the dialogue, Morsi pointed out that the water level of Egypt's Nasser Lake might be affected by the dam and that the power generation of Egypt's High Dam might also be decreased by 18 percent.