Landsvirkjun was founded on 1 July 1965 by the state of Iceland and the city of Reykjavík.

[3] The city of Reykjavík contributed to the company three power stations on the Sog River.

[4] Shortly after its founding construction on[clarification needed] the Búrfell hydropower station began.

[6] Three hydropower stations on the Laxá River previously owned by the municipality of Akureyri were merged into Landsvirkjun.

[7][4] The hydropower stations Búrfell, Sigalda, Hrauneyjafoss, Blanda, Sultartangi, Vatnsfell, and Fljótsdalsstöð were all built by Landsvirkjun.