The dam is located within the protected Lar National Park, and situated just 70 kilometers northeast of the capital and the most populous city of the country, Iran.

The primary purpose of the dam is municipal water supply to Tehran but prior to the water reaching the city filtration plant, it is used to power the Kalan and Lavarak Hydroelectric Power Stations, with a combined installed capacity of 162.5 MW.

The ideal place for the dam was over the Lar river, in the northeast section of the city, at the elevated heights of the Kalanbasteh mountain on the slope of Mount Damavand.

These were no longer capable of meeting the city's water demand, so inevitable abstraction from ground resources started to increase in a manner that at the present situation, the quantity of drilled deep wells has amounted to 230 rings.

In fact, from 1997-2000, it had been orderly abstracted, 317, 289, 374 and 357 MCM (million cubic metres) of water from groundwater resources of the city.