The potential of the Ōi River valley for hydroelectric power development was realized by the Meiji government at the start of the 20th century.

The first dams on the Ōi River were completed in the late 1920s and early 1930s, but further work was suspended by the Great Depression of the 1930s, and World War II in the 1940s.

Design work on the Ikawa Dam began in 1951, with construction starting in 1952 with a foreign aid grant from OCI, facilitated by the American occupation authorities.

The dam design introduced the technique of hollow-core concrete construction to Japan, which had previously been used with success in Italy.

Construction of the 103.6 metres (340 ft) tall dam was facilitated by its location on the Ōigawa Railway Ikawa Line, and was completed in 1957.