According to the terms of the Versailles Peace Treaty after World War I, Germany was banned from building and operating submarines among other "offensive" weaponry.

Commander Karl Bartenbach, who had retired from active service in the Reichsmarine, worked as secret liaison officer in Finland.

His official title was Naval Expert of the Finnish Defence Forces, and it was under his leadership that the 496-ton Vetehinen class and the 100-ton Saukko were built in Finland.

For the German Navy, his mission was to oversee the developing and construction of a 200–250 ton submarine, which would still equal the combat effectiveness of the Vetehinen class.

The official decision allowing Vesikko to be constructed in Finland was made in 1930 after several meetings with the Finnish Government.

For example, the maximum depth was over twice that of earlier German submarines, and its hull could be built completely by electric welding.

By eliminating rivets there was increased resistance to water pressure, decreased oil leakages, and the construction process was faster.

Vesikko was deployed with Vesihiisi to the Hanko region on 30 November 1939 as several Soviet surface combatants were headed towards the area.

[1] In summer 1941 all Finnish submarines were once again readied for combat operations and they sailed to the staging area in the Gulf of Finland.

When the Continuation War started on 25 June, all submarines were ordered to patrol the eastern part of the Gulf of Finland.

On 3 July 1941 Vesikko sank a Soviet merchant ship named Vyborg east of Gogland island.

Very soon after the strike, three Soviet patrol boats started to chase Vesikko and tried to destroy it with depth charges and assist the damaged ship but failed to accomplish either task.

[2] Soviet historiography later downplayed the sinking of Vyborg, insisting that several submarines and German naval bombers had assaulted the ship simultaneously, and that over twenty torpedoes had been launched against it.

In 1942, equipped with depth charge rack, she acted as an escort to convoys in the Sea of Åland, and hunted suspected hostile submarines near Helsinki.

The Military Museum moved Vesikko to Susisaari island in Suomenlinna, on the shores of Artillery Bay, and restored the submarine.

However, with donations and voluntary work, the restoration was completed, and Vesikko opened as a museum on the anniversary of the Finnish Navy, 9 July 1973.