Present study deals with performance analysis of an inert gas generator (IGG) which is to be used as an effective mean to suppress the fire. The IGG uses a turbo jet cycle gas turbine engine to generate inert gas for fire extinguishing. It is generally known that a lesser degree of oxygen content in the product of combustion will increase the effectiveness of fire suppressing. An inert gas generator system with water injection will bring advantages of suffocating and cooling effects which are considered as vital factors for fire extinguishing. As the inert gas is injected to the burning site, it lowers the oxygen content of the air surrounding the flame as well as reduces the temperature around the fire as the vapour in the inert gas evaporates during the time of spreading. Some important aspects of influencing parameters, such as, air excess coefficient. $alpha$, compressor pressure ratio, $ pi_c$, air temperature before combustion chamber, $T_2$, gas temperature after combustion chamber, $T_3$, mass flow rate of water injection, $M_w$, etc., on the performance of IGG system are investigated. Calculations of total amount of water needed to reduce the turbine exit temperature to pre-set nozzle exit temperature employing a heat exchanger were made to compare the economics of the system. A heat exchanger with two step cooling by water and steam is considered to be better than water cooling only. Computer programs were developed to perform the cycle analysis of the IGG system and heat exchanger considered in the present study.