Built as part of a massive postwar effort known as the Great Construction Projects of Communism, it was authorized by Joseph Stalin signing the Council of Ministers of the USSR order #3555 on 6 August 1950.

The plan called for building a station north of the city of Stalingrad (modern Volgograd) with a minimum storage capacity of 1.7 million kWh.

Ten thousand youths from the Komsomol league participated in the construction, and the city of Volzhsky was formed on the left bank of the river to provide housing.

Several years later, for the first time in the world, an experimental 800 kV DC line, Donbas to Volgograd, was successfully tested and later became operational.

In addition, there were projects for the irrigation of the excessive adjacent dry region of the left bank Volga south of it, particularly the West Kazakhstan Province.

The power generated by the station is used primarily by the city of Volgograd, by Moscow, by Donbas via the only long distance HVDC-line in Russia, the HVDC Volgograd-Donbass.

One of the most negative results that the dam caused was that it destroyed the traditional path of Caspian fish migration to their breeding grounds.