A series of severe droughts in Sydney region led to the construction of the Warragamba Dam. Sydney's initial fresh water came from the Tank Stream, but as Sydney continued to grow the water was often in short supply and polluted. In 1869 a member of the Commision of Inquiry, Lieutenant Thomas Moore, recommended the construction of a 52 metre high masonry dam on the Warragamba River. The scheme was judged economically and technically impracticable.

Successive droughts in the period 1897-1902 again brought investigation into the feasibility of a dam on the River but again was
abandoned. However in the prolonged drought of 1904-1910 interest was revived and by 1919 a site for a large dam had been selected. In the meantime the Cataract, Cordeaux, Avon and Nepean Dams continued to be developed as a major source for Sydney.

Between 1934-1942 Sydney experienced its longest drought and Sydney's 1.5 million people were left with only 15 months water supply. Restrictions were severe and strictly enforced. At one stage only 6 weeks water supply remained. There was no time to build a large dam so the Sydney Water Board decided to build a weir on the river and pumping the water through a temporary pipeline to Prospect Reservoir. This was called Stage 1 "Warragamba Emergency Scheme". This took 18 months to complete commencing in 1938 and completed in 1940, delivering 180 mega litres daily and provided sufficient water until the drought broke in May 1941.

The outbreak of World War II further deferred major construction until work finally commenced in 1948. Two coffer dams were built and a 300 metre concrete lined tunnel 5.5 metres wide by 4.2 metres high was built on the eastern side. The diversion tunnel was capable of carrying up to 6.15 million litres a minute.

Excavation of the site commenced in 1948 and continued for 5 years. Over 2.3 millions tonnes of rock were removed. Floods left tremendous amounts of silt and debris with up to 90,000 cubic metres of deposits being excavated after each flood. In 1956 there was 14 separate floods, delaying constructions.

The first concrete was poured in June 1953 and continued for 24 hours a day until the project was completed in 1960. More than 2,550,00 tonnes of sand and gravel were needed. This was obtained from the Nepean River near Penrith and delivered to the dam site by a series of 600 buckets, each holding 1,250kg via a aerial ropeway and at 30 second intervals.

The design of placing concrete, together with the block construction, resulted in Warragamba Dam being crack free. There are five crest gates installed to start to operate automatically when water rises 75mm above the full supply level. The water falls 100 metres into the stilling pool at a rate of 12.7 mega litres per second. A hydro electric power station was designed as an integral part of the dam using surplus water to supply 50 megawatts of electricity into the State grid system. This no longer operates.

Between 1987 and 1989 the dam wall was raised 5 metres and strengthened using post tensioned steel cables and tying the upper portion of the wall to its base. This was the first step in a two stage solution to strengthen the dam in case of the 1 in 1000 year flood. Work began on stage two of the safety program in 1999. This involved the construction of an auxiliary spillway o the eastern bank of the dam. This was completed in 2002 and is designed to allow floodwater to pass safely around the dam and reduce pressure on the dam wall.