Construction of the dam commenced in 1978, funded by aid granted by the United Kingdom under the patronage of Queen Elizabeth II, was completed during the presidency of Junius Richard Jayewardene, and was ceremonially opened by the Prime Minister of the United Kingdom, Margaret Thatcher.

The plan is designed to irrigate 365,000 ha (901,935 acres) of land and provide 600 MW of electricity.

The Victoria Dam was originally proposed in 1964 after studies were completed by Canada's Huntings Technical Services and a team from the United Nations Development Program—Food and Agriculture Organization (UNDP-FAO).

[1] Construction of the dam was inaugurated on 14 August 1978, by the then-President Jayewardene with the implementation of the main structures beginning in 1980.

These penstocks created a net head of 190 m (623 ft), feeding three 70 MW 12.5 kV turbines, which are capable of generating up to 780 GWh of electrical energy annually.