The dam was proposed to provide flood regulation and reliable water supplies for South Australia, which pumps water from the lower Murray through pipelines across the Mount Lofty Ranges to Adelaide, and parts of the Mid North, Yorke Peninsula and Eyre Peninsula.

The four governments would share the costs evenly, however the Commonwealth would extend a loan for the New South Wales component in exchange for water from the Menindee Lakes during construction.

Most of the impervious core and the compacted sand shoulders of the dam embankment were to be sourced from local materials of specific layers of soil.

[6] Sixty FCD-class flatcars were constructed by the Islington Railway Workshops to carry skips that could be taken off the train by crane to move the rock to where it was required.

A siding near Kinchina Quarry was built between Murray Bridge and Monarto South, to collect the stone.

[9][10] The dam and reservoir would have flooded the wetlands in what is now the Chowilla Game Reserve, Chowilla Regional Reserve and northern edge of the Murray-Sunset National Park and potentially raised salinity in the Riverland and lower Murray as the reservoir would have been quite shallow in a hot dry climate.

The dam was first proposed and announced by Tom Playford, the Liberal and Country League premier of South Australia in 1960.

Playford's government had been in office since 1938, and through that time had presided over significant economic and infrastructure development in the state.

Playford and the LCL won the 1962 state election only with the support of independent Tom Stott in an otherwise-hung parliament.

[13] The future salinity concerns were raised in contrast to the local economic benefits to be brought by the construction project.