Wheat yield and protein content in a field are spatially variable due to inherent variability of soil properties and landscape. In Mediterranean environments yield variability in space and time is caused by irregular weather patterns, particularly rainfall, and by position in the landscape. A tested crop simulation model, SALUS, was used to select optimal nitrogen fertilizer rates using strategic and tactical approaches in a spatially variable field where three distinct management zones had been previously identified. The crop model was tested and then used to simulate seven N rates from 0 to 180 kg N ha−1 with a 30 kg N ha−1 increments for 56 years using historical weather data. The available soil water at the time of N sidedressing each year and each management zone was correlated with yield response to N to evaluate the possibility of using the stored soil water to tactically determine N rates. Assuming recent production costs and grain prices the simulations helped identify an optimal N rate for each of the zones based on agronomic, economic and environmental sustainability of N management. Results showed the high yielding zone had a maximum economic return and minimal environmental impact in terms of nitrate leaching by applying 90 kg N ha−1 annually. On the other hand, the low yielding zone had little economic returns for application higher than 30 kg N ha−1. When simulated soil root-zone water was low at sidedressing, a lower fertilizer rate increased profit and decreased N leaching in the medium and high yielding zones.