The Department was officially created under president Ramón Barros' administration on December 2, 1911, under law № 2,575, published in the Chilean Diario Oficial newspaper.

[3] The creation of the Department caused controversy in Peru, due to both countries disagreeing on their border in the Sama river.

While the Chilean government argued the town was to the east of the river, the border agreed upon by both countries, Peru disputed this claim on the grounds that the territory was not affected by the Treaty of Ancón and sent representative Carlos Maria Elías to protest the situation, also establishing a policy of non-recognition.

[13][14][15] U.S. President Calvin Coolidge mediated the dispute in Peru's favor in 1925, more so than other heads of state.

[16] Around the same time, a commission, headed by U.S. General John J. Pershing arrived to assist with the planned Tacna-Arica plebiscite, which eventually would never take place.