First principles electronic structure calculations have been carried out to investigate the ground state geometry, electronic structure, and the binding energy of [Au(H2O)(n)](+) clusters containing up to 10 H2O molecules. It is shown that the first coordination shell of Au+ contains two H2O molecules forming a H2O-Au+-H2O structure with C-2 symmetry. Subsequent H2O molecules bind to the previous H2O molecules forming stable and fairly rigid rings, each composed of 4 H2O molecules, and leading to a dumbbell structure at [Au(H2O)(8)](+). The 9th and the 10th H2O molecules occupy locations above the Au+ cation mainly bonded to one H2O from each ring, leading to structures where the side rings are partially distorted and forming structures that resemble droplet formation around the Au+ cation. The investigations highlight quantum effects in nucleation at small sizes and provide a microscopic understanding of the observed incremental binding energy deduced from collision induced dissociation that indicates that [Au(H2O)(n)](+) clusters with 7-10 H2O molecules have comparable binding energy. The charge on the Au+ is shown to migrate to the outside H2O molecules, suggesting an interesting screening phenomenon.