The House of Commons authorised an Act of Parliament in June 1829 for the canal with work beginning in 1832.

A railway was constructed soon afterwards between Fenit and Tralee carrying cargo and freight from ships moored there.

In 1999 the Office of Public Works (OPW) started a restoration project of the canal at a cost of IR£650,000.

It involved the excavation of the basin, a new swing bridge constructed at Blennerville, the lock gates being restored and the canal being dredged of silt.

The basin area of the canal was subsequently redeveloped with apartment blocks built as part of a proposed marina while the towpath along the canal was upgraded and is now used by people as an enjoyable amenity as part of the Dingle Way.