The Nagara Estuary River dam was planned as part of this larger policy framework. The location was to be within five kilometers from the Ocean. Partly to gain support from local people for this plan, the Water Agency emphasized the need of the dam to prevent frequent floods and damages to the lower stream residences. However, the main purpose of constructing this dam for the government's perspective was to prevent sea water from contaminating agricultural and industrial water supplies. The government approved this dam scheme in 1968 but took more than 15 years to negotiate with fishermen's communities.

In the 1980s, when the boom of industrial developments subsided and the rise of the middle class leading to the increasing awareness of environmental protection, the dam construction plan met another strong opposition. Most major rivers by then had been heavily polluted by intensive industrial activities. The Nagara River was the only river in Japan without a dam. Some lower stream fishermen depended on their livelihood from harvesting fresh water clams. The river also had some endemic trout species and important sources of livelihood for fishermen.

Despite the opposition, the dam construction was completed in 1994 and began its operation in the following year under the Japan Water Agency, now an incorporated administrative agency.