The dam's main purpose is to redirect water from the Snowy River to the Murray, for the generation of hydro-power and irrigation.

The dam was constructed by a consortium of Utah-Brown and Sudamericana based on engineering plans developed under contract by the Snowy Mountains Hydroelectric Authority.

At 100% capacity the dam wall holds back 688,227 megalitres (24,304.5×10^6 cu ft) of water.

The flow of water into Lake Jindabyne is particularly strong during the spring months of October and November due to snow melt.

This caused environmental concerns about the state of the lower reaches of the Snowy River in Victoria and NSW.

In 2000, the NSW and Victorian Governments reached a long-term agreement to increase the flow of water into the Snowy to 28%.