The purpose of the dam is to prevent saltwater intrusion upstream, supply water for the irrigation of about 45,000 ha (110,000 acres) of crops and create a road crossing for the road between St. Louis and Nouakchott in Mauritania.

Construction on the Diama Dam began on 15 September 1981 and was completed on 12 August 1986.

The Diama project was funded by a US$149.5 million loan from the African Development Bank.

[citation needed][1] The main section of the dam with ship lock and spillway is 170 m (560 ft) long while a 440 m (1,440 ft) long embankment dam section extends north to the edge of the river.

[2] The small town of Diama is known as a border crossing to and from Mauritania, as the dam is the only land bridge between the two countries.