Iron working on the lands of present-day Nyby is first mentioned in written sources from the 15th century.
The canal was approximately 2 kilometres long, had three locks and was constructed to circumvent the natural rapids in Torshällaån at Torshälla.
However, the canal proved short-lived and gradually fell out of use during the first half of the 17th century due to lack of maintenance, but the stream thus left by the canal provided a natural source of water power.
[2] The Nyby village remained independent of the neighbouring town of Torshälla until 1952, when the two were merged.
Since 2002 the main production facilities at Nyby bruk are owned by Finnish stainless steel manufacturer Outokumpu.