Exploration of the intermolecular binding energy in nanometer-sized small water clusters in hydrophobic solvents and its evolution with the increase in the cluster size until bulk-type geometry is reached constitute a fascinating area of research in contemporary chemical/biological physics. In this contribution we have used femtosecond/picosecond-resolved solvation dynamics and fluorescence anisotropy techniques to explore the dynamical evolution of water clusters in dioxane continuum as a function of water concentration. We have also used temperature dependent picosecond-resolved solvation dynamics in order to explore the magnitude of the intermolecular bonding energy in the water clusters in bulk dioxane.