It was built between 1970 and 1978[3] together with the Mohelno Reservoir as a water source for the nearby Dukovany Nuclear Power Station.

As it has the fastest-starting turbines of all dams in the Czech Republic (less than 1 minute to full power) it also acts as emergency source in case some of the reactors in Dukovany shut down (for that reason it was also initially equipped with total capacity of 450 MW to back-up one of the four 440MWe VVER440 reactors).

Thanks to the turbine capability to act as pumps, it also plays significant balancing role for distributing network when it pumps water back to the higher reservoir during the night and uses it again to produce electricity during the daily consumption peaks.

It creates 7-km-long lake and has total capacity of 17.1 million cubic metres (600×10^6 cu ft).

Thanks to this, the whole Dalešice-Dukovany complex is certified for fully autonomous operation independent of the external distribution network.