Nagarjun Sagar project was started in 1955- 56 and it took about 8 years to complete the project. Under the project a 1,450 meter long and 124.7 meter high masonry dam with 3,415 meter-long eastern flanks has been built near Nandikonda village (Nalgonda district) across the Krishna river.
The reservoir so formed spreads over an area of 118 sq. km with storage capacity of 1,156 crore cubic meters. It lies in the transition zone of plateau and plains facilitating the easy flow of the water up to the coastal plains. Two canals, one on each side of the river, have been taken out from the reservoir which together irrigates about 8.95 lakh hectares of land in Khammam, West Godavari, Guntur, Kurnool and Nellore districts.
The left bank canal named after Lai Bahadur Shastri is 357 km long (constructed up to 179 km) which will finally join the Godavari river. The right bank canal is called Jawahar Canal. It is 344 km long (dug up to 204 km) and will join the Penner river. The project also envisages a power house at the toe of the Nagarjun Sagar dam with total installed capacity of 210 mw. This electricity will be utilised for the industries located in the neighbouring towns of Mahbubnagar, Nalgonda, Hyderabad, Vijayawada and Khammam etc.