We present a new implementation of the hydrological cycle scheme into a general circulation model of the Martian atmosphere. The model includes a semi‐Lagrangian transport scheme for water vapor and ice and accounts for microphysics of phase transitions between them. The hydrological scheme includes processes of saturation, nucleation, particle growth, sublimation, and sedimentation under the assumption of a variable size distribution. The scheme has been implemented into the Max Planck Institute Martian general circulation model and tested assuming monomodal and bimodal lognormal distributions of ice condensation nuclei. We present a comparison of the simulated annual variations, horizontal and vertical distributions of water vapor, and ice clouds with the available observations from instruments on board Mars orbiters. The accounting for bimodality of aerosol particle distribution improves the simulations of the annual hydrological cycle, including predicted ice clouds mass, opacity, number density, and particle radii. The increased number density and lower nucleation rates bring the simulated cloud opacities closer to observations. Simulations show a weak effect of the excess of small aerosol particles on the simulated water vapor distributions.