The dam was built between two mountains i.e. Kuravanmala and Kurathimala. The dam was under the ownership of Kerala State Electricity Board. The dam produces about 780 MW of hydroelectric power. Idukki Dam is the highest arch dams of Asia and third tallest arch dam. Since, October 4, 1975, the Idukki Dam started the production of Electricity. The Idukki Dam was built with other two dams i.e. Cheruthoni and Kulamavu. These three dams together formed an Artificial Lake.

The height of the dam is 168.91 m and length is 365.85 m. The dam holds about 450,000 cubic meters of water. Officially the dam was inaugurated by the Prime Minister Smt. Indira Gandhi, on February 12, 1976. Periyar River is the largest river of Kerala. The town also has an Idukki Wildlife Sanctuary which extends over the two talukas of Idukki district and covers an area of about 77 Km. which is 450-748 m above the Sea Level. The sanctuary having wildlife attraction of Elephants, Bison, Tiger, Sambar Deer, the variety of Snakes and birds, and many other creatures enhance the beauty of the Sanctuary and attract a lot of tourists towards it.

The construction of Idukki was financed by the Government of Canada, in the form of long-term loans and grants. As well as, the Engineers of Canada were the Advising and Assisting Project Engineers under Canadian Aid. The contract of Construction of the dam was given to Hindustan Construction Company (HCC) of Whalchand Group.