Built from 1830-1833, the canal linked two Finger Lakes: Keuka and Seneca.
Mill owners along the outlet stream had complaints about a lack of water throughout the operation of the canal.
The original wooden locks soon rotted and were due for replacement with stone, at a cost of over $107,000.
In 1972, the rail line was destroyed in flooding and related damage from Hurricane Agnes.
The former route of the canal is partly marked as the modern 6.7 mile Keuka Outlet Trail for hiking and biking.