The dam's foundation stone was laid by Prime Minister of India Pandit Jawaharlal Nehru on 7 March 1954,[2] and construction of the main dam was done by leading contractor Dwarka Das Agrawal & Associates and was completed in 1960.

The International Bird Life Agency (IBA) has qualified the reservoir under "A4iii" criteria, as the congregation of waterbirds is reported to exceed 20,000 at some points.

The dam is situated at a distance of 168 kilometres (104 mi) from the district administrative headquarters of Mandsaur.

The Chambal River had not until then been used for any major developmental works, and was proposed to be developed under a joint initiative of the state governments of Madhya Pradesh and Rajasthan.

The water received at the Kota Barrage is shared equally between Madhya Pradesh and Rajasthan for irrigation.

This dam is a concrete gravity dam, 45 metres (148 ft) high, located approximately 23 kilometres (14 mi) upstream of Kota Barrage to its southwest, and provides a hydroelectric power generation capacity of 99 MW, with three generator units of 33 MW capacity each.

[2] The Gandhi Sagar Dam and Power Station were built at a total cost of about Rs.

The catchment area of the Chambal River from the Vindhyachal ranges to the south and Aravalli to the northeast, covering a drainage area of 22,584 km2 (8,720 sq mi); important tributaries that discharge into the Chambal upstream of this reservoir include the Shipra, Chhoti, Kalisindh, Ansar, and Rupniya on the eastern side, and the Tilsoi, Edar, Retum and Shivna in the west.

Commercial Fisheries was initiated in 1959–60 in Gandhi Sagar, and has been credited as the best-managed reservoir in the state.

The results indicate that the Gandhi Sagar reservoir attained its full storage condition only during five years of its first five decades of operation.

The energy generation of all the three power plants declined by 25% in the same period of 50 years, relative to the projected 50-year figures.

that the full reservoir level in the Gandhi Sagar Dam be reduced by suitable operational guidelines, which would enable the release of substantial submergence area for cultivation by the farmers who originally owned these lands.