A new quasi three-dimensional finite element model of groundwater flow is developed for highly compressible multiaquifer systems where aquitard permeability and elastic storage are dependent on hydraulic drawdown. The model is solved by a block iterative strategy, which is naturally suggested by the geological structure of the porous medium and can be shown to be mathematically equivalent to a block Gauss-Seidel procedure. As such it can be generalized into a block overrelaxation procedure and greatly accelerated by the use of the optimum overrelaxation factor. Results for both linear and nonlinear multiaquifer systems emphasize the excellent computational performance of the model and indicate that convergence in leaky systems can be improved up to as much as one order of magnitude. ¿ 1996 American Geophysical Union.