Constructed between 1777 and 1784, the Eider Canal was built to create a path for ships entering and exiting the Baltic that was shorter and less storm-prone than navigating around the Jutland peninsula.

[3] As early as 1571 Duke Adolf I of Holstein-Gottorp proposed to build an artificial waterway across Schleswig-Holstein by connecting an eastward bend of the River Eider to the Baltic Sea, so as to compete with the nearby Stecknitz Canal for merchant traffic.

[6] After the incorporation of Holstein into the Danish crown by the 1773 Treaty of Tsarskoye Selo, geopolitical conditions at last permitted a canal's construction and operation.

On 14 April 1774, King Christian VII of Denmark issued a cabinet order establishing a Canal Commission to oversee the construction, led by Heinrich Carl von Schimmelmann.

The artificial canal was then excavated and fitted with locks to allow ships to cross the peninsula's drainage divide and descend to the Kieler Förde on the Baltic coast.

Construction on the artificial segment, eventually 34 kilometres (21 mi) long, began in July 1777 at Holtenau on the Baltic shore north of Kiel, proceeding to Knoop by the following autumn.

Between the Baltic and the upper Eider there was a difference in elevation of about 7 metres (23 ft), which required the construction of six locks, located at Rendsburg, Kluvensiek, Königsförde, Rathmannsdorf, Knoop, and Holtenau (from west to east).

In 1866 the Second Schleswig War resulted in Schleswig-Holstein's becoming part of Prussia, after which the German government explored a number of options for renovating or replacing the canal to improve commercial and military access to the Baltic.

The canal ran westward in the small river's natural bed to the first lock, by the Holtenau packing house, and on to the second, by Gut Knoop.

[4] Significant parts of the former Eider Canal, along with four of its locks, are now in protected areas as important elements of the historical and cultural landscape in Schleswig-Holstein.