This paper provides a mathematical description of hydromechanical coupling associated with propagation of localized damage. The framework incorporates an embedded discontinuity approach and addresses the assessment of both hydraulic and mechanical properties in the region intercepted by a fracture. Within this approach, an internal length scale parameter is explicitly employed in the definition of equivalent permeability as well as the tangential stiffness operators. The effect of the progressive evolution of damage on the hydro-mechanical coupling is examined and an evolution law is derived governing the variation of equivalent permeability with the continuing deformation. The framework is verified by a numerical study involving 3D simulation of an axial splitting test carried out on a saturated sample under displacement and fluid pressure-controlled conditions. The finite element analysis incorporates the Polynomial-Pressure-Projection (PPP) stabilization technique and a fully implicit time integration scheme.