The actual lake is elevated 716 m above sea level, has an area of 55.8 km2 and a total volume of 782 million m³.

The hydroelectric power plant system was conceived mainly to provide electricity for the Dalmatian coastline and further development of tourism.

The governments of Bosnia and Herzegovina and Croatia (republics within Yugoslavia at the time) worked together on a project to build a hydroelectric power plant in Ruda (municipality of Otok in Croatia) called HE Orlovac that would have an output of 237 MW and an average annual yield of 366 GWh.

In this system Lipsko Lake is a compensation basin and serves for regulation of an outflow of water toward intake facility at penstock station "Lipa" at the foot of Kamešnica mountain, and across the border into Croatia where hydroelectric power plant "HE Orlovac" is situated.

Lipsko Lake is connected with much larger reservoir of Buško Blato, whose head can rise above head of Lipsko Lake up to several meters, via the reversible canal of "Lipsko-Buško" where it stores an excess waters from Livanjsko Polje and the Bistrica, especially during flooding season and high precipitation periods.