When water potential decreases, the change is detected by osmoreceptors in the hypothalamus. The pituitary gland then releases more ADH, which increases the permeability of the collecting ducts, resulting in concentrated urine.
When water potential increases, the change is detected by osmoregulators in the hypothalamus, so the pituitary gland releases less ADH which decreases the permeability of collecting ducts. This results in dilute urine.