The canal was constructed in the first half of the 19th century, commissioned by Alexander Milne, who owned large tracts of land that would later become part of the city of New Orleans but were at the time mostly swamp.
The canal originally served to commerce of small boat traffic from Lake Pontchartrain to the "Back of Town" section of New Orleans in addition to limited swamp drainage.
In the early 20th century the old "London Avenue Machine" steam-pump at the head of the Canal was replaced with a more efficient system of high capacity pumps designed by A. Baldwin Wood.
The London Avenue Canal Levee and floodwall breached on both sides during Hurricane Katrina in late August 2005 at surge levels more than four feet below design specifications.
In October 2005, the Army Corps of Engineers convened an investigation of the levee breaches that occurred during Hurricane Katrina called the Interagency Performance Evaluation Task Force (IPET).